Can you believe it is already mid-July? I am not sure where the summer is going but I can tell you that it has been a busy one so far. A recent article in the Wall Street Journal announced that The U.S. Housing Bust is Over and that housing prices are on the rise. The numbers show that much of the increase has been due to investors purchasing homes to rent out as rents are at an all time high right now with little vacancy.In fact, in the last month, I personally have encountered sellers that are refusing to budge on price, multiple offers on a property, new construction selling in under 30 days and loosening credit guidelines for some borrowers. All signs of an improving market and signs that I for one will welcome. The opportunity is prime for home buyers and investors with rates under 3.5% this week. If you have not already taken my FREE investor course, click here to get signed up. I will be adding some great reports to my website soon that you will love!
Now….Let’s talk about financing options available out there: If you are a first time home buyers, knowing the different types of financing available can be confusing so I will try to help you out with the basics. Underwriting guidelines are complicated and will vary from bank to bank and broker to broker, so you may need to check several different sources to get the best program for you.
USDA Rural Development Loans: These loans are great if you are short on cash. USDA offers 100% financing for qualified homes. In the Statesville area, this means homes outside the city limites. All of Troutman and Mooresville qualify for USDA. You can check the map for any address you are considering at their website. These loans are very popular in our area as the buyers can get into a home with very litte money out of pocket. You can ask the seller to pay your closing costs and will not need a down payment. USDA does have a income limitation and that can also be found on their website. There are several types of USDA loans but for the most part, we use the USDA Guaranteed Loan or the USDA Direct Loan (for very low income buyers). The USDA funding fee is rolled into your loan and rates are based on current market rates. Talk with your lender about all the details for qualifying. USDA loans do not have mortgage Insurance.
FHA Loans: The Federal Housing Administration, which is part of HUD, insures your loan so that you can qualify for better terms. They do not actually lend the money, but guarantee the loan for the lender based on certain guidelines set by FHA. In many cases, the lenders will also have additional qualifying guidelines that may be more stringent than FHA that you will also need to qualify under. These additional guidelines will vary from lender to lender so be sure to shop around. With FHA loans, there are many options available depending on situation: FHA loans do include Mortgage Insurance in the monthly payment.
What does FHA have for you?
Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.
Want a fixer-upper?
FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs – all in one loan. Called the 203K Loan.
Financial help for seniors
Are you 62 or older? Do you live in your home? Do you own it outright or have a low loan balance? If you can answer “yes” to all of these questions, then the FHA Reverse Mortgage might be right for you. It lets you convert a portion of your equity into cash.
Want to make your home more energy efficient?
You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing. They have two loan products – one for those who own the land that the home is on and another for mobile homes that are – or will be – located in mobile home parks.
BB&T CHIP Loan: This loan is very similar to the USDA Guaranteed loan as far as qualifying but it allows you to use the 100% loan within the city limits of Statesville. The Community Housing Investment Program offers no down payment and favorable terms. There are also limits on income but well worth a look if you want to be close to downtown. This program does not have mortgage insurance allowing for higher buying limits. Talk to your local BB&T loan officer for all the details.
VA Guaranteed Loan: For our veterans out there, you may find a great deal on a VA loan. If you are eligible, you will find lending guidelines are much easier than traditional financing.
A VA-guaranteed loan can be used to:
· buy a home, a manufactured home, or a condominium
· buy a lot for a manufactured home
· build, repair, or improve a home (including energy efficient improvements)
· refinance an existing loan
A VA-guaranteed loan offers a number of safeguards and advantages over a non VA-guaranteed loan. For example, the interest rate is competitive with conventional rates with little or no down payment required. VA-guaranteed loans are made by private lenders, such as banks, savings and loan associations, and mortgage companies. As with any loan, you must apply directly to the lender. Your real estate broker can assist you in finding a lender.
NC Housing Agency: If income has kept you out of the housing market, you may want to take a look at NC Housing Programs. They offer FHA, USDA Conventional and VA loans at very competitive rates for first time home buyers plus you may quality for up to $8000 in down payment assistance or for a $25000 second mortgage to help with purchasing a new home. First time home buyers should also check into the MCC (Mortgage Credit Certificates) that is a Federal Tax Credit to assist buyers with low or moderate income. This is really helpful in helping ot offset your monthly mortgage payment. Ask your lender about these programs and if you qualify. For a list of lenders, check out their website.
Fannie Mae Homepath Financing: HomePath financing, available only on Fannie Mae-owned properties, offers great benefits — low down payment, no mortgage insurance, expanded seller contributions, and more. HomePath Mortgage is available for move-in ready properties for both owner occupants and investors — a limited number of HomePath lenders also now offer HomePath Mortgage for the LLC borrower. The HomePath Renovation Mortgage provides both the funds to purchase and to renovate in one loan. You also can use the financing of your choice from any lender, such as your local bank, credit union or other financial institution.
OTHER: You will also have 100% options available with your Credit Union or Conventional products that may fit your situation better. There are many other sources available for financing your first home or for purchasing an investment property. Feel free to call me anytime to discuss the various options or for a referral to one of my lenders. Two of the best are listed below for you!