New FHA Rule

Have you heard about the new rule for mortgages insured by the Federal Housing Administration?

Starting on April 1st, 2012 the FHA will no longer be insuring mortgage commitments to borrowers that have more than $1,000 in ongoing credit disputes in the file. What this means is that you will have to either pay off the amount or enter into a payment plan for the balance in order to qualify. Just saying you have set up a payment plan isn't enough though. The plan has to be documented with and submitted to the FHA and you have to have made at least 3 payments.

There are some exceptions though. Of course if it's listed as fraud/identity theft then that will not count against you. Also, any disputes that are older than 2 years will not be held against you either.

The FHA has said that part of the reason is because their reserve, which is mandated by congress has fallen bellow the limit (which is why they will also be increasing the insurance premiums on the 1st as well).

So what are you thoughts? Oh....and as always....

Keeping the Plants Frost Free!

Most of us here in Western New York may have gotten a little too excited too soon by the summer like weather. But really, who can blame us? It was floating between 70 and 80! Then last night, in true WNY fashion, we were at 30 degrees and everything was freezing. Farmers were putting tents and blankets over crops to prevent them from killing the early blooms. They even added heaters and fans! But do you need to go to that extreme to keep away the freeze?

The answer is actually pretty simple and for some of you...you may actually be on it right now. The answer? A sheet! But hey, what about that tarp you have? Won't that work? According to garden shop owners, plastic is actually worse than doing nothing at all. The plastic will create a "freezer burn" effect that will kill the plants so stick with a sheet. Hold it down with a few rocks, and don't remove it until the sun has had plenty of time to warm it up.

Discount Points

The name alone sounds enticing doesn't it? I mean, who wouldn't want a discount...ESPECIALLY on the largest purchase most of us will ever make! But what exactly are discount points and how do you get them?

Discount points (also know as closing or mortgage points)are a type of prepaid interest that mortgage borrowers can purchase to lower the amount of interest they will have to pay on subsequent payments. Just like with origination points, 1 point is equal to 1% of the total loan. So, on a $100,000 loan each point would be equal to $1,000. Each point you pay can lower your interest rate from 1/8 to 1/4 of a percent. Another great thing (as if lowering your interest rate wasn't enough) is that discount points are also tax deductible in the year that they are paid.

So give one of our Mortgage Specialists a call!

Mortgage Origination Points

Especially if you are a first time home buyer you may be sitting there, reading this, and thinking to yourself...."Mortgage points? Who's keeping score?" Well hopefully this will clear it all up for you!

To start with let's explain what a mortgage point is and don't worry...it's not that complicated. A mortgage point is a fee based on one percent of the total mortgage. So if your mortgage amount was $100,000 then each point would be valued at $1,000. There are two different types of points though.

Origination Points are used to pay for the costs of getting the loan in the first place. Typically it is a fee to compensate the lender or loan officer for evaluating, processing, and approving the loan. Origination points are also not tax deductible.

In the next post we will be talking about Discount/Closing Points. Until then...check us out below!

What is a Short Sale?

Short sales can be a great deal for a buyer but a stressful situation for a seller. Not to mention that the short sale process can be a complex transaction altogether!

What makes a home sale a short sale really are two factors:
-The house is valued less than the owner owes (also known as "underwater")
-The homeowner must have a qualified hardship

But what exactly makes a hardship qualified? "I owe more than my house is worth? Isn't that alone a hardship?" The answer to that would be a no. What makes it a hardship is an event that will make it hard for the home owner, whether it be now or in the future, to pay the mortgage.

Here are some examples:
-Job Relocation
-Medical Hardship
-Business Failure
-Death in the Family
-Divorce/Speration
-Loss of Employment

Of course, each situation is different so please consult a professional (like our Mortgage partners) and speak with them!