Blog - Mortgage Topics

 Posted in Mortgage Topics on February 14th, 2011 at 12:48 PM


Recent statistics show that 1/4 of all mortgage holder in the US have negative equity or "upside down" mortgages. What exactly does that mean? Negative equity is when the collateral that secures the loan (the property value) is less than the loan balance.  In it's simplest terms the house is worth less than the mortgage. A study down by First American CoreLogic shows the number of homeowners in this situation has increase over the past few years and will likely continue until home values stabilize.

What does that mean to the average homeowner?  Well, obviously no one wants to hear their home value has gone down, but unless you are looking to sell, refinance, or borrow against your home it doesn't mean very much.  Real estate appreciation is a long term proposition and as long as you continue to pay your mortgage and stay in your home, historically, you should see your value increase over time.

What if I need to sell my home now?  When a home is sold with negative equity the term used is a "short sale".  Most of the time in this circumstance the homeowner negotiates with the lender to accept a lower amount than the current loan balance.  This can be a difficult, timely, and stressful thing to do.  That is where a professional, experienced, agent can help. Our agents work with the owner to market the home, find a buyer willing to pay fair market value, and work with you and the lender to resolve the sale.  If you think you are in this situation and need to sell your home DO NOT wait for foreclosure from the lender. The lenders would prefer that you come to them with a reasonable offer rather than go through the expensive process of taking back your home - which they will just have to sell anyway. If you would like more information on how to handle a short sale please call one of our agents for a free, confidential consultation to determine your properties current value and discuss your options.

Boyertown Office: 610-367-2058               Pottstown Office: 610-326-0181


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 Posted in Mortgage Topics on August 25th, 2010 at 4:57 PM


Interest rates continue to be low. The national average rate for a 30 year fixed rate residential mortgage is below 4.5%.

How low will they go? No one knows for sure, but what is known is that they will not stay this low forever. That makes this a great market to be a buyer.

Consider this: A $100,000 loan with a 4.5% rate (30 yr. term) is $506 per month. That is $60 per month cheaper than just a few short months ago when rates were commonly at 5.5%.   The other way to look at that is a buyer today can borrow $12,000 more towards the home purchase today and keep the same payment as a few months back. Couple that with the slide in prices and today's buyer can potentially afford $20,000 to $25,000 more house than in the spring.  Considerably more than what you got with the Federal Tax Credit!   


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 Posted in Mortgage Topics on February 4th, 2010 at 5:06 PM


Looking to purchase a home don't have much cash to use as a down payment?

The US Department of Agriculture may have the right mortgage for you. 

 

The Rural Housing Home Loan program will finance up to 100% of the appraised value of the property, so no down payment is needed.  Additionally, the seller can some or all of the buyer's closing costs at settlement! There are stipulations however. First, the property's location must qualify. This includes most of Berks County, and parts of Montgomery and Chester (ask your Glocker agent if a home qualifies). Second, there are income limits on the buyer. This varies by county, so it is best to ask you Glocker agent.  Third, the property must meet certain condition requirements. These can include a good water test and septic inspection and certain safety items. Lastly, the property must be used as a primary residence.

 

This program is offered through many local mortgage brokers and banks.  To see if you qualify for the mortgage call any of our offices and ask to speak with one of our knowledgeable Realtors. They can answer your questions and recommend a qualified lender.

 

Plus...if you are a first time buyer you could qualify to receive an $8,000 dollar tax credit for buying the home!!!

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 Posted in Mortgage Topics on January 22nd, 2010 at 3:52 PM


The Federal Housing Administration has announced changes to their lending guidelines that will affect many of today's buyers.  Please speak with your Glocker Realtor or lender to see how these changes will affect your ability to purchase a home.
 

Announced FHA Policy Changes:

  1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
    • The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
    • If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
    • This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
    • The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.
  2. Update the combination of FICO scores and down payments for new borrowers.
    • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
    • This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
    • This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
  3. Reduce allowable seller concessions from 6% to 3%
    • The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
    • This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.
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