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HUD Announces Policy Changes for FHA Mortgage Loans

January 30, 2012 By Leave a Comment

      FHA Buyers Need to Act Now

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On January 20, 2012, the FHA announced policy changes for FHA Mortgage Loans which will have a financial impact on many home buyers, and will also affect many home sellers whose property appeals to FHA home buyers. The proposed policy changes for FHA Mortgage Loans will increase the Mortgage Insurance Premium(MIP), relate the FICO Score to minimum down payment requirements and reduce the allowable seller concessions from 6% of the sale price to 3%.

Upon origination of a FHA Mortgage, there is a fee charged to the buyer commonly referred to as UFMIP (Up Front Mortgage Insurance Premium).  This Up Front Mortgage Insurance Premium is added to the original mortgage loan amount and is financed over the length of the loan. The home buyer’s mortgage loan payment is then calculated based on the increased loan amount(Initial Mortgage Loan + UFMIP). The Upfront Mortgage Insurance Premium payments go into an escrow account set up by the U.S. Treasury Department and the funds are used to protect the government in case the borrower defaults on the FHA Mortgage.

Currently, this UFMIP fee is 1.15% for FHA Mortgages with less than 5% down and 1.1% for for down payments over 5%. The FHA announced that it plans on increasing this up front mortgage insurance by .5% , and to go into effect in the Spring. That is an increase of $1,000 on a $200,000 mortgage loan. FHA home buyers generally finance the Upfront Mortgage Insurance Premium and it is added to the buyers original mortgage. Monthly are then based on the total of the original mortgage plus the financed Upfront Mortgage Insurance Premium. In other words, a FHA home buyer’s mortgage payment will be higher once this proposed increase in the Up Front Mortgage Insurance Premium becomes effective..

The FHA is also proposing a change in required FICO Scores requirements as they relate to down payment requirements. New borrowers will be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. Buyers with less than a 580 FICO score will be required to put down at least 10%. This change will be posted in the Federal Register in February  for comments. Early Summer is the planned date for implementation.

Another planned policy change is that of allowable seller concessions. Currently at 6% of the sales price, the FHA is planning on reducing the amount of seller concessions to 3%. This change will be posted in the Federal Register in February  for comments and early Summer is the planned date for implementation.

However, there may be further consideration and change to this proposed change by the FHA due to reaction from real industry professionals. There is the possibility that rather than proposing an across the board reduction of seller concessions to 3%, consideration may be given to perhaps allowing 4% or 5% on smaller loans, 3% on loans above  some set sales price limit or perhaps setting a maximum dollar cap on seller concessions rather than a percentage cap.

Current policy allows a seller is to contribute 6% their sale proceeds to help with the buyer’s closing cost. While that amount may be excessive for closing costs and prepaids in some market areas, a change to 3% will have a negative impact on many buyers seeking a FHA Mortgage. Due to historically low and favorable home prices, many buyers are in the market to purchase a home who have the required 3.5% down payment and have sufficient income to qualify for the mortgage payment, but do not have the additional savings for . There needs to be some compromise in this proposed change in sellers concessions.

Click the Link below to read the article.
HUD Announces Policy Changes for FHA Mortgages
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 The above article,“HUD Announces Policy Changes for FHA Mortgage Loans”, was written by , REALTOR, Broker Owner, ., , New Jersey and regularly posts real estate articles of interest for home buyers, home sellers and home owners.

 David can be reached via email or by phone at 732-283-3400 or at www.DavidFialk.com.

 Licensed since 1971, David has helped over 1800 families move across town, across the state and across the country and  specializes in the towns of  Iselin, Colonia, , Woodbridge, Avenel, Fords, Sewaren, Port Reading, Keasbey, Carteret and Metuchen in , New Jersey.

 Planning on purchasing real estate? Thinking of selling your home? For real estate information ”You Can Rely On, Contact the REALTOR You Can Rely On”.

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Filed Under: Down Payment Requirements, FHA, Home Buying, Mortgages, Real Estate News

Real Estate Sale Statistics Iselin, New Jersey

January 21, 2012 By Leave a Comment

Real Estate Sale Statistics in , New Jersey

Obtaining reliable information regarding real estate statistics in Iselin, New Jersey can be important to home buyers interested in buying a home in Iselin, but they can also be important for Iselin homeowners, whether thinking or planning on selling their home or not! It is easy to understand why obtaining reliable real estate sale statistics in Iselin would be important for someone interested in purchasing or selling a home at the moment or in the very near future. But why would real estate sale statistics be valuable information for a homeowner not planning on selling?

Real estate values affect real estate taxes. The possibilty may exist for a Tax Appeal, and the potential to obtain a reduction in real estate taxes. Wondering if a tax appeal is possible? Contact your Local REALTOR first to obtain information regarding the current value of your home and then speak with the local Tax Assessor. Many homoeowners are  obtaining real estate tax reductions!

Every day there are news media reports providing real estate sale statistics about the current real estate market . However, real estate sale statistics vary throughout the Country, for the Northeast Region, for the State of New Jersey and for . Economics 101 states that what is true of the whole, is not true of the parts. Real estate is local! Real estate values vary from one town to another and from area to area within the same town.

The current real estate market provides many opportunities for home buyers, and for many current homeowners who have plans to sell their current home and purchase another one. 

View real estate sales statistics for Iselin from 2002- 2011 as reported by the Middlesex county Multiple Listing System.

Iselin, New Jersey Real Estate Sale Statistics, 2002-2011

 Would you like to view sale prices of sold homes in Iselin during 2011? Click here .

Would you like to view real estate sale statistics for 2011 as compared to 2010 for all towns in Middlesex County. Click here.

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The above article,“Real Estate Sale Statistics in Iselin, New Jersey”, was written by , REALTOR, Broker Owner, ., Iselin, New Jersey and regularly posts real estate articles of interest for home buyers, home sellers and home owners.

David can be reached via email or by phone at 732-283-3400 or at www.DavidFialk.com.

Licensed since 1971, David has helped over 1800 families move across town, across the state and across the country and  specializes in the towns of  Iselin, Colonia, , Woodbridge, Avenel, Fords, Sewaren, Port Reading, Keasbey, Carteret and Metuchen in Middlesex County, New Jersey.

Planning on purchasing real estate? Thinking of selling your home? For real estate information ”You Can Rely On, Contact the REALTOR You Can Rely On”.

 

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Filed Under: Home Buying, Home Owners, Home Selling, Real Estate News, Real Estate Statistics, Real Estate Values Tagged With: ,

Middlesex County Real Estate Statistics for 2011

January 17, 2012 By Leave a Comment

 

Middlesex County Real Estate Statistics

Wondering what the Real Estate Statistics  for 2011 look like as compared to 2010?

Reading and listening to news media reports about the current real estate market can be very confusing! National reports and statistics cover the entire country, including new construction, one family homes and condominiums and townhouses. Real estate is local! Homeowners and potential homebuyers want information regarding the market where they live or where they are interested in buying.

What has happened in real estate in Middlesex County in 2011? Did real estate sales transactions increase? Did real estate values increase, drop or level off in 2011?

Whether you are looking to buy, are interested in selling or are just curious about the real estate market, real estate is local! Real estate sales activity and real estate values vary, whether you live in , New Jersey, Colonia, , in another town in Middlesex County or in any other State. They even vary from one area in a town to another. What’s true of the whole is not necessarily true of the parts!

 

Print Middlesex County Real Estate Statistics for 2011

Want to view closed sales in or around your town in Middlesex County for 2011? Click here for lots of real estate statistics!

Interested in reliable real estate statistics where you live. Contact your REALTOR, and I am sure they can provide similar information. Not sure about who to call, just ask, and I will be happy to help!

____________________________________________________________________________________________

The above article,“Middlesex County Real Estate Statistics for 2011”, was written by , REALTOR, Broker Owner, ., Iselin, New Jersey and regularly posts real estate articles of interest for home buyers, home sellers and home owners.

David can be reached via email or by phone at 732-283-3400 or at www.DavidFialk.com.

Licensed since 1971, David has helped over 1800 families move across town, across the state and across the country and  specializes in the towns of  Iselin, Colonia, Edison, Woodbridge, Avenel, Fords, Sewaren, Port Reading, Keasbey, Carteret and Metuchen in Middlesex County, New Jersey.

Planning on purchasing real estate? Thinking of selling your home? For real estate information ”You Can Rely On, Contact the REALTOR You Can Rely On”.

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Filed Under: Home Buying, Home Selling, Real Estate Information, Real Estate News, Real Estate Statistics, Real Estate Values Tagged With: , , ,

David Fialk, New Jersey Realtor, Celebrates 40 Years in Real Estate

September 27, 2011 By Leave a Comment

, New Jersey REALTOR and Broker Owner of Choice Realty Co., 1144 Green St., , New Jersey, is now celebrating 40 years in real estate.

David Fialk_Choice RealtyTalk about the changes in real estate and in the real estate industry in the last 40 years! Talk with David!

Obtaining his real estate license in 1971, David  has witnessed, experienced and adjusted to all types of changes in the real estate industry. And 40 years later, he is still actively involved in listing and selling real estate on a daily basis and helping his buyer and seller clients by providing real estate services with a “commitment to service excellence“.

David Fialk has been involved in real estate transactions with mortgage interest rates ranging from 4.25% to 19.4% and has successfully marketed and sold more than 1800 homes since 1971, whether real estate values and home prices were rising or declining. 

He has also experienced many changes in the real estate industry. Whether those changes were related to federal and state real estate rules and regulations, changes in the mortgage industry, changes in the delivery of property listings through the Multiple Listing System or the marketing of properties on the internet, David Fialk has continuously adjusted his real estate business and business practices to meet the new challenges. In fact, Choice Realty.com, appeared on the world wide web with property listings in 1995 which resulted in the first closed real estate sales transaction from an email inquiry in February, 1996.

As an active member of the National Association of REALTORS, New Jersey Association of REALTORS and the Association of REALTORS, David has continuously served as either Chairman or Committee Member on various committees throughout his real estate career. Currently, he is a Director on the Board of Directors of all three Associations.  A firm believer in education for the real estate professional, David has earned the real estate designations: CRB, CRS, ABR, GRI, e-PRO Certified Internet Professional.

” For Information You Can Rely On, Contact the REALTOR You Can Rely On”

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Filed Under: David Fialk, Real Estate News, Real Estate Services Tagged With: , , , , , ,

Qualified Residential Mortgage: The Proposed 20% Down Payment Rule

July 24, 2011 By 3 Comments

Are you aware that there is a move in Washington which could require a minimum down payment of 20% on the purchase of a home?  It’s called the Qualified Residential Mortgage, commonly referred to as the  Rule.

The rule as proposed could have the effect of requiring borrowers to have a 20% down payment on the purchase of a home in order to qualify for the best mortgage interest rate. The QRM is just one part of the Dodd–Frank financial regulation bill that was supposed to require lenders to do a better job of underwriting mortgages. Want to obtain more information about the Qualified Residential Mortgage, read this information provided by the National Association of REALTORS and or see what Google has found.

Many year ago when I entered the real estate business, 1971 to be exact, the first thing I educated myself on was qualifying a buyer. There were mortgage payment qualifying guidelines then and there are guidelines now. Whether the mortgage was Conventional, VA or FHA, there were down payment and income guidelines for each type mortgage loan, such as the 28%/36% Rule. Simply stated, a borrower’s monthly mortgage payment(PITI) should not exceed 28% of their montly gross income(front ratio) and the monthly payment plus monthly recurring debt should not exceed 36% of monthly gross income(back ratio). 

A very simple guideline, but one that truly stood the test of time for mortgage qualifying. 

And then, the real estate frenzy started in 2002 and carried through early 2006. Buyer demand exceeded available listings. Buyers were moving up into larger homes, they were purchasing second homes, they were purchasing rental homes and condos and they were looking to purchase fixer uppers and flip them. There was a buyer for every listing that came on the market. And more ofter than not, buyers were stepping over each and outbidding others just to purchase a home.

And yes, there were many buyers who were purchasing homes that were beyond their financial income limits. But, what about the mortgage qualifying guidelines that have stood the test of time for so long?

Well, the banks wanted in on this real estate and mortgage borrowing frenzy too! They loosened qualifying guidelines and increased income qualifying ratios. What was once  a 28%/36% qualifying guideline became 41%/46%. To help even more buyers, many lenders also allowed the buyer to borrow the down payment for the home purchase in the form of a second mortgage. And on top of that, a home buyer was also able to negotiate the contract offer where the home seller would be paying for buyer closing costs as a seller concession. That was done by negotiating the sales price with buyer closing costs lumped in.

Great mortgage rates, great lender qualifying, a dream come true for home buyers!

Fast track forward to the period between mid 2006 and the present, in no special order.  The financial mess on Wall St. The government bailout. Potential home buyers stopped looking. Real estate values weakened, then dropped and have continued dropping in most all areas of the country.  Lenders started qualifying buyers again using appropriate qualifying standards. The economy weakened and, from a public perspective, is still weakening. What double dip, we never got through the first dip! Job layoffs started, and are continuing with no end in sight. Unemployment rampant, with no end in sight. New employment opportunities? Where? Late ? In more families than could ever be imagined! Mortgage delinquencies? Foreclosure notices? ? , becoming impossible to track due to the shear number of families affected. The list could go on!

Talk about the “perfect storm”!

I am a REALTOR. I am not an Economist, Banker or Government Regulator. I do believe that any consideration to a change in mortgage financing which would require a buyer to have a 20% down payment in order to obtain the best mortgage interest rate will not fix what is all wrong right now in the banking industry or in the US economy. I do believe that any mortgage regulation which forces home buyers with less than 20% down to obtain a mortgage loan with higher fees and higher interest rates would hinder the ability of many potential buyers from obtaining affordable housing.

NAR_Home Owner Action Center

Stop the 20% Down Payment Requirement. Click the Image Above. Let your opinion be known!
Don’t be bashfull! Spead this around. Tweet it. Post it on your Blog, Facebook, Linkedin and Google+.

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Filed Under: Home Buying, Real Estate News Tagged With: , ,

Is Some REAL ESTATE NEWS Only HALF THE STORY?

July 23, 2011 By Leave a Comment

Is it Possible That Articles
Tell Only Half the Story?

On Thursday, July 21,  2011 on the front page of the Business Section of the Star Ledger, the following real estate news related article was labeled:
“Of Interest: Closing costs increase as housing slump continues”
Here is the link to this article on NJ.com.

The first sentence of the article quoted a Bankrate survey released this week stating that “closing costs in New Jersey were the 7th highest in the country this year” and the 2nd paragraph stated that “this year, average loan origination and title fees on a $200,000 mortgage averaged $4,589 in New Jersey”.

Question: If you were thinking of purchasing a home, would that article title prompt you to take the time to read it?
Question: If you were planning your finances to purchase a home, would you assume that average $4,589 for a home purchase with a $200,000 mortgage in New Jersey.

Is the article about real estate closing costs increasing in New Jersey or is it about the increase in mortgage fees related to purchasing a home?

Here’s the problem with the way the article was titled. The headline leads a reader to believe they will be obtaining information about real estate closing costs in New Jersey. However, the content of the article only refers to the increase in mortgage lending fees, loan origination fees and title fees, and does not include information related to actual real estate closing costs on a home purchase. Wouldn’t it make more sense to have a title such as “Closing Costs rise in New Jersey as mortgage fees increase”?

Yes, mortgage related expenses are part of real estate closing costs, whether you are buying a home in , Colonia or in , New Jersey or in any other town, county or state in the country. However, they are just part of a home buyer’s closing costs and expenses when purchasing a home. Why would an article be titled “closings costs increase …” when the article concentrates only on mortgage related fees? Is the title misleading or is it telling only half the story? 

The truth of the matter is that real estate closing costs do consist of charges related to title ownership and mortgage fees, but they also include many other costs and expenses directly related to ownership of the home being purchased.

Real estate closing costs are an important financial consideration when purchasing a home. A home buyer needs to be financially prepared for expenses during the real estate transaction and at closing. During the transaction, a home buyer can expect to pay for property inspections, such as a home inspection, termite inspection and radon test, a mortgage application fee and an appraisal fee. While not necessarily considered closing costs, these are direct expenses related to purchasing a home. Have these fees increased for a home purchase in New Jersey?

When purchasing a home and qualifying for a mortgage loan, a home buyer needs to verify that they have sufficient funds for the down payment and the closing costs. For a home purchase with a $200,000 mortgage loan, actual closing costs will be much more than $4,589.

These are the types of fees and costs related to the purchase of a home, and are commonly referred to as closing costs.

  • Attorney Fee
  • Title Insurance Policy
  • Searches
  • Survey
  • Recording Deed and Mortgage
  • Real Estate Tax Escrow
  • Loan Origination Fee
  • Lender Fees
  • Home insurance Policy
  • Escrows(Homeowners Insurance, Mortgage Insurance(MIP or PMI, if applicable)
  • Miscellaneous
  • Interest Expense(per diem interest charges from day of closing to the last day of the month)

Other than increases related to loan origination and title fees, were there increases to the other charges and expenses in a real estate closing? That question was not answered in the article.

Considering a home purchase? Surprises are for Birthdays, Not Buying a Home!

Obtaining a reliable estimate of anticipated real estate closing costs is very important. They do represent a large expense. Here are the type of professionals you need to meet with
                                     REALTOR, Mortgage Professional, Attorney
and rely on to obtain the information to make the Home Buying Experience a Pleasant One!

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Filed Under: Buyer Closing Costs, Home Buying, Real Estate News Tagged With: , , , ,

Do Short Sales Affect Home Values in Neighborhoods?

April 15, 2011 By Leave a Comment


What happens to real estate values when are placed on the market for sale in the neighborhood you live in?

What happens when the short sale sells, and sells at a price much below the range of surrounding homes in the neighborhood?

Whether your home is in , New Jersey, in Colonia, in , in or any other County or State, distressed property real estate sales such as short sales, bank owned properties(REO) or will have an affect on home values in neighborhoods and towns. The questions is, how much of an impact on market values will these type real estate sales transactions have?

Commonly referred to as “distressed properties”, these type property sales currently exist in all type neighborhoods. They are not isolated to lower price range neighborhoods. All neighborhoods and price ranges have been affected, some Towns, Counties and States more than others due to economic conditions in those areas.  Short sales can be found in rural areas, suburban locations, urban locations, community developments, resort locations and in estate locations of most every City, Town, County and State.

Very simply stated, a short sale is a home on the market for sale where the owner is behind in their , is unable to obtain a mortgage loan modification, is unable to make their mortgage current, the mortgage balance exceeds the market value of the home and foreclosure is imminent. When placed on the market for sale, agreement must be obtained from the mortgage holder(s) that they will accept less in the sale price than what is owed on the mortgage. Mortgage holders have realized that a short sale is financially more preferred than foreclosure.

The first impact of short sales in neighborhoods is visual.

Unlike foreclosed properties and REO homes, not all short properties are visual eye sores. Many are currently occupied by the owner, and are generally considered well kept requiring little or no exterior repairs or maintenance. These listings may be competitively priced and in direct competition with other properties on the market for sale. The eventual sale price may be less than other sales in the area, but a sale which may not cause future market value deterioration in a neighborhood.

But what about those sales where the property is in need of exterior repair, the “eye sore” in the neighborhood? What about the vacant home short sales, where both the exterior and interior of the home is in immediate need of repair?Properties like these will be aggressively priced, and priced below current values in the neighborhood.

When sold and closed, at a price much below the value of surrounding homes, what affect do “short sales” have on surrounding property market values?

Some Facts:
The real estate sale is public information on tax records.
The sale price is posted in the Multiple Listing System upon closing.
Appraisers use the MLS when appraising similar properties.
Real estate agents use the MLS when researching sales to provide Market Analysis Reports to homeowners considering selling.
Buyers obtain sales information when considering making an offer on a home they like in the same area.

The important question is how this that short sale interpreted?

What are your thoughts?

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Filed Under: Foreclosures and Short Sales, Home Selling, Real Estate News, Real Estate Values Tagged With: , ,

1099 Landlord Reporting Law Repealed

April 9, 2011 By Leave a Comment

Important Information to Rental Property and

During 2010, new reporting requirements were added to the duties of investment property owners which would have required all investment property owners who paid over $600 to service providers to issue Form 1099 in 2011. Previously only real estate professionals engaged in property management type businesses had been required to  file Form 1099 to service providers. View previous post on January 21, 2011 on this.

Congress had extended the Form 1099 requirement to any person who receives rental income in that 2010 legislation. That requirement would have applied to any landlord(including a small investor), rather than only those who are in the business of managing property. Yes, it would have been time consuming for all rental property owners.

The GOOD NEWS! Congress this week passed legislation to repeal that provision in the small business legislation enacted last year!

As an income property owner I am happy that law was repealed and I thank the National Association of REALTORS for their efforts!

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Filed Under: Investment Property, Real Estate News Tagged With: , ,

Changes in FHA Mortgage Loans Coming April 18, 2011

February 16, 2011 By 1 Comment

FHA Loans Will Cost More After April 18, 2011
The FHA Mortgage Insurance Premium (MIP) will increase 25 Basis Points

Just the other day, FHA Commissioner David H Stevens announced changes for . These changes are for any FHA loans that are assigned case numbers on or after April 18, 2011.

Instead of paying the current rate of .9 % of the loan amount, and then dividing that by 12 to reach the amount of MIP paid monthly, the new calculation will be 1.15 % of the loan amount divided by 12 to equal the monthly payment.

Example: $250,000 Mortgage Loan
.9 % Calculation: $250,000 X .009 = $2,250 /12 = $187.50 per month
1.15% Calculation: $250,000 X .0115 = $2,875/12 = $239.6 per month
This is an increase of $52.00 per month!

The upfront mortgage insurance premium (UFMIP) amount will remain unchanged at this point and remain at the current rate of 1.0% of the loan amount.

These changes will affect monthly and !

If you have been prequalified to purchase a home and have not yet found the right one, take a more serious approach to looking now and purchasing one before April 18th! After April 18th, the mortgage payment will be more and you will need to update your mortgage pre approval to reflect these new MIP monthly premiums.

Contact your REALTOR for more information! Contact your Mortgage Representative for more information! are still near historic low levels! Home prices have become more affordable!

Don’t Just Sit on the Fence and Watch!

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Filed Under: Home Buying, Mortgage Pre Approval, Mortgage Pre Qualification, Mortgages, Real Estate News Tagged With: ,

Mortgage Rate Update

February 11, 2011 By Leave a Comment

Let’s Talk About Again!

Mortgage Interest Rates

Well, interest rates increased to over 5% in December, 2010. Then they retreated to a little under 5% in January, 2011. Now, they are moving back up above 5% again. Refresh your memory with a review from my January 10th post.

First of all, mortgage rates at 5% are near historic lows. And yes, they may retreat again to under 5 % again. BUT……

What if they don’t? What if they rise further? As the interest rate increases, so does a home buyer’s mortgage payment. A small mortgage rate  increase of .25% increases a mortgage payment approximately $32.00 per month on a $200,000 mortgage loan. The options are either paying $32.00 more per month, borrowing approximately $6,000 less in a mortgage loan or paying $6,000 less in the price for a home just because of an rate increase of .25% relative to a $200,000 mortgage loan. Not too pleasant in thinking about if you are currently looking to purchase or are planning to look for a home shortly, is it?

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Filed Under: Home Buying, Mortgage Interest Rates, Mortgages, Real Estate News Tagged With: ,
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