NEW LENDING POLICIES ANNOUNCED BY FHA!!

If you were listening to the housing news last week, you probably heard a number of reports about lending changes that were announced by the Federal Housing Administration (FHA).  While many f the news reports were confusing, the truth is pretty clear, and isn’t as bad as some people may have heard.

Overall the measures are intended to help the FHA better manage its risks and strengthen its capital reserves, while still providing home loans to the nation.  The good news, as FHA Commissioner David Stevens stated recently, is that “by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery” and “remain the largest source of home purchase financing for underserved communities.”

What’s Changing?

If you or someone you know is considering an FHA loan, some of these changes may affect you.   Here’s a clear, concise rundown of the major changes and what they mean:

1.  Increased mortgage insurance.  The mortgage insurance premium (refered to as private mortgage insurance by many people) will be increased from 1.75% to 2.25%.  This change will add some cost to purchasing a home, but will not overburden consumers since the mortgage incsurance is paid over the lfe of the loan, rather than upfront at closing.

2. new down paument and credit score requirements.  According to the new policy, homebuyers who have a credit score of at least 580 may still be able to purchase a home with 3.5% down, but those with credit scores of less than 580 will be required to put down at leat 10%.  This change is designed to help the FHA balance its risk while still providing affordable downpayments for consumers with a history of good credit and responsibility.

3.  Reduced seller concession.  Basicly, this change means that the person selling the home will now only be able to offer the homebuyer 3% to help defray closing costs, as opposed to 6% under the previous law.

In addition to these changes, the new policies  contain a series of new measures aimed at increasing lender enforcement.

These changes will become effective on April 5, 2010.  The bottom line is that the changes will impact some homebuyers more than others.  But in the end, the FHA is still committed to providing affordable home loans.

If you’re concerned about your credit score or are worried about what these changes may mean to your specific situation, please call or email to schedule an appointment.  There are many different programs available for homebuyers, so finding the right plan for you just requires a short discussion about your goals and financial picture.

Courtesy of Kristy Bryant, Bank of Missouri

Homebuyer Tax Credit Updates!!!

First-Time Homebuyer Changes

A first-time homebuyer credit applies to individuals who purchase a home on or after April 9, 2008 and before April 30, 2010.  However, if the buyer has the home under contract by April 30, 2010 they have until June 30, 2010 to close and still qualify for the credit.

The adjusted gross income cap of the credit has been increased as well.  It is now $125,000 for single taxpayers and $225,000 for married filing jointly.

Long-Time Homeowners
Who Qualifies

This credit applies to all existing homeowners who purchase a replacement principal residence and have lived in the same principal residence for any five consecutive year period within an eight year period that ends on the date the replacement house is purchased.  For these homeowners, there is a credit equal to 10% of the purchase price, capped at $6,500.  The same caps for adjusted gross income existing in the first-time homebuyer credit also apply to this credit.  This legislation was signed into law on Nov. 6, 2009.  Therefore only homes bought after this date and before April 30, 2010 qualify.  If a home is under contract by this date, the purchaser has until June 30, 2010 to close and still qualify for the credit.  Any home purchase exceeding $800,000 will be excluded from this credit

When Can The Credit Be Claimed?

The credit is taken in the year the taxpayer purchases the home.  The date of purchase is the date title closes.  However, a taxpayer purchasing the home in 2009 may elect to claim the credit on their 2008 tax return instead of waiting to file it on their 2009 tax return.  An amended return may be filed to claim the credit for 2008.  This rule will also apply for homes bought in 2010.  You may file the credit on your 2009 return or wait until filing your 2010 return to claim the credit.

New Filing Requirements For Both Credits

Due to fraudulent credit reporting, the IRS has issued new guidelines for reporting credit.  The following items must be sent with the return when the credit is being filied: a copy of the closing statement (including signatures of all parties, names of seller and buyer, property address and purchase price), a copy of taxpayer’s most recent mortgage statement, and verification that the property is a residence.  To verify the property is a residence at least two of the following items showing taxpayer’s name and address required:  driver’s license, pay statement received in past 2 months, back statement received in past 2 months, or current auto registration.  If the home is newly constructed, an occupancy permit must be submitted for that property.

Homebuyer Credit Updates

First -Time Homebuyer Changes

A first-time homebuyer credit applies to individuals who purchase a home on or after April 9. 2008 and before April 30, 2010.  However, if the buyer has the home under contract by April 30, 2010 they have until June 30, 2010 to close and still qualify for the credit.

The adjusted gross income cap of the credit has been increased as well.  It is now $125,000 for single taxpayers, and $225,000 for married filing jointly.

Long-Time Homeowners
Who Qualifies?

This credit applies to all existing homeowners who purchase a replacement principal residence and have lived in the same principle residence for any five-consecutive year period with in an eight-year period that ends on the date the replacement home is purchased.  For these homeowners, there is a credit equal to 10% of the purchase price, capped at $6,500.  The same caps for adjusted gross income existing in the first-time homebuyer credit also apply to this credit.  This legislation was signed into law on November 6, 2009.  Therefore, only homes bought after this date and before April 30, 2010 qualify.  If a home is under contract by this date, the purchaser has until June 30, 2010 to close and still qualify for the credit.  Any home purchase exceeding $800,000 will be excluded for the credit.

When can the credit be claimed?

the credit is taken in the year the taxpayer purchases the home.  The date of purchase is the date title closes.  However, a taxpayer purchasing the home in 2009 may elect to claim the credit on their 2008 tax return instead of waiting to file it on their 2009 tax return.  An amended return may be filed to claim the credit for 2008.  This rule will also apply for homes bought in 2010.  You may file the credit on your 2009 return or wait until filing your 2010 return to claim the credit.

New Filing Requirements for Both Credits.

Due to fraudulent credit reporting, the IRS has issued new guidelines for reporting the credit.  The following items must be sent with the return when the credit is being filed: a copy of the closing statement (including signatures of all parties, names of seller and buyer, property address and purchase price), a copy of taxpayer’s most recent mortgage statement, and verification that the property is a name and address required:  driver’s license, pay statement received in past 2 months, bank statement received in past two months, or current auto registration.  If the home is newly constructed, and occupancypermit must be submitted for that property.

H1N1: Information is the Best Defense!

The only portals of entry of the H1N1 virus are the nostrils and mouth/throat. In a global epidemic of this nature, it’s almost impossible not coming into contact with H1N1 in spite of all precautions. Contact with H1N1 is not so much of a problem as proliferation is.

While you are still healthy and not showing any symptoms of H1N1 infection, in order to prevent proliferation, aggravation of symptoms and development of secondary infections, some very simple steps, not
fully highlighted in most official communications, can be practiced (instead of focusing on how to stock N95 or Tamiflu):

1. Frequent hand-washing (well highlighted in all official communications).  This is not a joke.  Make it a ritual habit… make it part of your daily routine… DO NOT BE LAZY…!!!

2. “Hands-off-the-face” approach. Resist all temptations to touch any part of face (unless you want to eat, bathe or slap).

3. *Gargle twice a day with warm salt water (use Listerine if you don’t trust salt). *H1N1 takes 2-3 days after initial infection in the throat/ nasal cavity to proliferate and show characteristic symptoms.  Simple gargling prevents proliferation. In a way, gargling with salt water has the same effect on a healthy individual that Tamiflu has on an infected one.  Don’t underestimate this simple, inexpensive and powerful preventative method.

4. Similar to 3 above, *clean your nostrils at least once every day with warm salt water.  *Not everybody may be good at Neti, but *blowing the nose hard once a day and swabbing both nostrils with cotton buds dipped in warm salt water is very effective in bringing down viral population.*

5. *Boost your natural immunity with foods that are rich in Vitamin C (Amla and other citrus fruits). *If you have to supplement with Vitamin C tablets, make sure that it also has Zinc to boost absorption.

6.* Drink as much of warm liquids as you can. *Drinking warm liquids has the same effect as gargling, but in the reverse direction. They wash off proliferating viruses from the throat into the stomach where they cannot survive, proliferate or do any harm.

LET’S ALL BE HEALTHY AND HAPPY…!!!

Tax Credit Extention

Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time homebuyers  but is set to expire at the end of November.

Senators agreed to extend the existing tax credit, and offer a reduced credit up to $6,500 to repeat buyers who have owned their current homes for at least five years.

The tax credits will be available to homebuyers who sign sales agreements by the end of April 2010.  They would have until the end of June 2010 to close on their new homes.

As soon as we get some more information, we will update you further!

Budgeting For The Holidays…. Never Too Early To Start

It’s hard to believe, but Thanksgiving is just 1 month away.  And while that may seem like a lot of time, you’ll be diving into that turkey dinner sooner than you think… and right around the corner will come the Christmas holidays.  That’s why now is the perfect time to start planning for your holiday budget.  By formulating a plan now, you’ll achieve more than just the happiest of holidays.  you;ll ensure that the New Year will begin without worries of too little cash flow or too much debt.  Here’s how.

Learn from the Past

The best place to begin when it comes to planning for this year’s holiday spending is to examine what you did last year.   Dig up the credit card receipts and checkbook registers, and add up how much money you spent.   You’ll also want to take notes regarding where you spent it.  Don’t forget to include money used to purchase gift wrapping supplies, cards, postage, food while shopping, entertainment costs, and special-occasion clothing.

Now that the numbers are in front of you, it’s time to form an opinion.  How do you feel about last year’s spending?  Did you spend a realistic and appropriate amount, or did you go overboard?  Try to be objective.  This analysis will serve as the backbone of you plan.

Look at the Present… Pun Intended

Financially speaking, how have you fared this year compared to last year?  Be sure to look at any changes in income as well as expenses.  If your finances haven’t changed and you’re happy with last years spending, then you’re starting off in very good shape.  if your overall financial status has declined, or if you were less-than-pleased with last year’s performance, then you’ve got some work to do.

Begin by looking at the number of purchases you made a year ago.  Which ones would you make again and which ones have you scratching your head?  It may be time to reduce your gift-buying list or change the amount you spend on each purchase.   The obvious way to accomplish this is to be less extravagant with your selections.  A less obvious but often effective approach is to research your potential purchases.  Sometimes you  end up paying extra for the convenience of on-stop shopping, so look through the newspaper to find which stores are offering deals.  Then look on the internet to see if you can beat their prices by purchasing online.  This practice will cut down on last-minute shopping which can be an expensive proposition.

Look Toward the Future

So, you’ve figured out how many purchases you need to make as well as which ones need scaling back in terms of price.  Now it’s time to create a budget.  Once again, there is no magic formula.  Creating a budget and sticking to it requires two main things: common sense and commitment.  Let’s take a closer look.

A budget should always be based on the money you have, not the money you can borrow.  If you are still paying off charges from last year, then you need to avoid using credit cards to make gift purchases this year.  The amount of money you decide to allocate toward holiday spending should be based solely on what you’ve saved  or what you will save from now until the time you start shopping.

When drafting you budget, start b creating a list of recipients, along with columns for the gifts you intend to buy and the dollar amounts you expect to spend.  As you make purchases, keep track of the results.  If you overspend on one gift, it is imperative that you make up for it somewhere else.  Your diligence is one of the keys to staying within your budget.

It’s also important that you watch our for potential pitfalls, including impulse shopping.  Getting into the spirit of the holidays is one thing, but spending frivolously based upon a last minute decision is something else.  You’ve got a list, and your job is to stick to it!

One final thing that may need an adjustment is your overall philosophy.  It’s easy to look at the budget you’ve created as a restriction.  After all, it’s nothing more that a set of rules.  The flip side is that these rules are there for your protection.  Sticking to them will not only help you feel comfortable about your finances before and after the holidays, it will free you from the stress that comes from accumulated debt.  When you look at it this way, a budget can be downright liberating.  Give yourself the  gift of a financially stress free holiday, by planning in advance

NEW LISTING!!!

9801 Highway VV
Columbia, MO 65202

$167,500
MLS# 323374

Energy Star Rated Home, 2004 modular on permanent foundation. Light and Bright, open with tons of storage, covered front deck, beautiful view of stocked pond and 9.86 acres of cleared, wooded pasture. 23×19 oversized heated garage/workshop, 32×23 garage, equipment shed, minutes from Columbia. Split bedroom design, huge master suite, tons of counterspace, 3 seasons porch. Willing to divide 3.5 acres, home, garage, pond, etc. for 146,500

For more information visit www.9801HighwayVV.com.

Prepared Homebuyer…

“BEFORE ANYTHING ELSE.. PREPARATION IN THE KEY TO SUCCESS.”  Alexander Graham Bell. Very true words – and preparation is especially important these days, as several circumstances will make this fall a particularly successful time for prepared home buyers.

Rates for home loans remain low – but it won’t last forever.  The Fed continues on their purchasing plan of Mortgage Backed Securities, and the added demand has kept Bond prices high and home loan rates low.  Last week, they purchased another $32.4 billion, bringing the total to $849 billion out of the $1.25 trillion they committed to.  While these Fed purchases have helped home loan rates stay near present low levels, remember that their buying program is set to be over near the end of the year.  There is talk that the program will be extended – but there has also been talk that it will end early – so nothing is a guarantee, except for the fact that when the Fed purchasing program is over, home loan rates will assuredly rise.

In addition, given the current expiration date of November 30, 2009 for the $8,000 first time homebuyer credit, it’s important for homebuyers to get prepared, and take action.  In fact, many homebuyers are doing just that already.  The Mortgage Bankers Association reported that home loan applications surged in the latest week to their highest level since late May, as more buyers are seeing the great opportunity that exists right now.

The Stock market is doing well – and the S&P 500 Index closed at its highest level in 2009 last Thursday.

So if you are thinking of buying a home and want to talk to a Realtor, let us know.  You can e-mail us, visit our website, or call us at 573-447-4300.

Thanks to Kristy Bryant at Bank of Missouri.

Interest Rates

Here are some current interest rates as of 9/16/09 courtesy of Flat Branch Mortgage…

Conventional

30 year fixed – 5.25 (APR – 5.349)

20 Year Fixed – 5.25 (APR – 5.383 )

15 Year Fixed – 4.75 (APR – 4.918)

Government

FHA 30 year fixed – 5.25 (APR – 5.494)

VA 30 year fixed – 5.25 (APR – 5.527)

USDA 30 year fixed – 5.25 (APR – 5.520 )

Note: Assumes $120,000 loan minimum, verifiable income, single-family residence, no cash-out, a 620 score and an escrow established. Rates change daily and sometimes several times a day. They are not guaranteed and are subject to change without notice.

Slacking again!

Sorry everyone, I have been going to back to school lately and have been slacking on my blog updates. I am going to put some things up tonight and then I will catch you up on all the changes to our listing on Friday. Bare with me until then. Thanks for all the patience =)