New Mortgage Rules Rushed

New Mortgage Rules Rushed

Our market has been great this last year. While we aren’t fully recovered, we are on our way. How do we make sure we don’t’ experience the same crash we did just a few years ago?

You may have heard of the recent new rules regarding mortgage lending soon to be effective Jan. 1st of next year. The new rules are intended to prevent abuses such as banks lending to those who can’t repay or lending too much money in ratio to the real estate property.

The new Ability to Repay (ATR) Rules will require Qualified Mortgage (QM) loans to follow a specific template.

Sounds like a good idea, right? Bankers agree with the new regulations, they need more time, though, to get ready for the new rules.  In a recent article from the Omaha World Herald, Matthew Williams, chairman of the American Bankers Association, said banks need a delay of at least six months. If not, some banks will have to stop mortgage lending to ‘avoid legal problems and other issues’.

It may seem simple, enough; why do banks need more time? Software companies are still developing the programs needed to follow the new regulations. Once the programs are complete, personnel will have to be trained on how to use the system.

More than 50 banks from both Nebraska and Iowa signed a letter in July asking for a delay. Williams said he spoke with Valerie Jarrett, a senior adviser to President Obama about the new regulations and their need for a delay. He believes she understood the issue.

If you have questions about the new regulations and how they affect you in the buying process, call the Mortgage Doctor!

Why You Can’t Afford to Wait to Buy!

 Hey, guys! Thanks for joining me today!

If you’ve watched the news lately, you’ve probably heard about the increasing home prices and the increasing mortgage rates. In fact, home prices have increased by 12 percent since May of this year!

Why are prices increasing? According to economist Erik Johnson the “record-low rates, a lack of new homes on the market and years of pent up demand have been the driving forces behind the recent home price spike.”

That trend is expected to continue. What does that mean for you? The longer you wait to buy a home, the more it will cost you. You literally can’t afford to wait!

So, if you’re looking at homes on the market, give the mortgage doctor a call! I can help you get preapproved so you can take advantage of today’s market!

How an FHA 203k Loan Can Get You the Home of Your Dreams

How an FHA 203k Loan Can Get You the Home of Your Dreams

When most people look for a new home, they want a ready to move into property. The cost of having to fix and renovate a home can seem daunting. What if you could get a loan, though, that covered both the cost of the home, as well as the cost of repairs?

The FHA 203k loan is used to encourage lenders to fund what might be considered ‘risky’ home purchases. The purpose is to revitalize neighborhoods and drive more home ownership opportunities.

There are two types of FHA 203k loans: regular and streamlined. A regular 203k loan is for homes that need structural repairs, while streamlined are for homes that have nonstructural needs.

While the credit requirements vary, eligibility is considered more flexible and as little as 3.5 percent down payment is required on a purchase or up to 97.75%  loan to value on a refinance.

So, what kind of homes and repairs can qualify you for a FHA 203k loan? You first must plan to live in the home you are repairing. Then, if you have any of the following types of residence, you qualify:
• Tears-downs (foundation must remain)
• Existing construction of at least one year
• Single-family, two-family, three-family or four-family dwellings
• Condos (if they have been approved for FHA loans)
• Mixed-used property

Which repairs qualify? Below are some of the repairs that qualify. If you would like the full list please click here and download it.
• Disability access
• Plumbing
• Finishing an attic or basement
• Roofing and flooring

FHA 203k loans are great ways to build and design the home of your dreams, especially if a brand new home is out of your price range. If you have any more questions or are interested in applying for the loan, please give me call at 402-301-4500 or send me an email at terry@terrywilliams.com