Tag Archives: Fannie Mae

Going Broke While Saving Money

A ten dollar off coupon at the hardware store and a ten percent off discount for new carpeting, there are plenty of ways to trim costs for moving into a newly purchased home.  But none the less, moving is expensive.  And moving into a home you are buying, is even more expensive than if you were renting.  Renting requires first and last mont

A ten dollar off coupon at the hardware store and a ten percent off discount for new carpeting, there are plenty of ways to trim costs for moving into a newly purchased home.  But none the less, moving is expensive.  And moving into a home you are buying, is even more expensive than if you were renting.  Renting requires first and last month’s rent, plus the deposit.  Expensive yes, but typically the space is move-in ready.  However, when buying a home, as exciting of a venture it may be, its cost can be daunting especially since you can’t tell how much you are going to spend by the end of purchase and the home is not always move-in ready.  After the down payment, closing costs, moving costs and possibly even needed repairs if you have an FHA loan, you may be broke before you have a chance to get new furniture and paint!

Many of us might be aware that for first time home buyers there is an FHA loan available which is one way the down payment could be reduced, there is also the possibility of having the closing paid by someone else.  For example, a foreclosure owned by Fannie Mae is eligible for 3.5% closing cost to be covered by Fannie Mae.  The buyer does not have to be a first time home buyer, but they do need to be purchasing the home for the purpose of residing in it.  Also, this offer is for a limited time and expires in October of 2011.  For more info check out the Homepath.com website, you’ll find other special promotions offered by Fannie Mae as well as Fannie Mae foreclosures.

As for the cost of everything else to move, borrow a truck or trailer from a friend or family, what are friends for anyway?  Unfortunately, if you are buying a foreclosure with the new FHA loan, like myself, it’s not enough for the buyer to qualify, the house has to meet FHA living standards as well.  In today’s market with there being more foreclosures than the banks know what to do with and prices dropping, many banks owning these properties are not willing to fork out the expenses to make the house move-in ready or to even make the needed repairs to meet the FHA requirements.  This leaves the buyer with the additional cost making such repairs, and shall we mention the fee charged by the bank for not closing on time?  That is an issue that should be addressed when signing the sale agreement after an offer has been accepted.  Be sure that there isn’t a clause in the contract supporting a fee for not closing on time, and if there is, be sure that all parts of the transaction will work out smoothly or else you will be stuck paying a significant amount more than anticipated at closing, your down payment plus $100 per day after closing until you finally sign. Your realtor may be able to help you request an extension but even that is by the bank’s approval and not a guaranteed loophole.

In the whole process of things, the buyer saves money with a reduced down payment, a deduction from closing costs, coupons at the hardware store for paint and supplies, and simply offers to pay friends gas for their truck rather than renting a truck, and the buyer is moving in with a drained savings account.  At least the buyer knows that it is all going into an investment… a long term investment.

~Stephanie Paz

Now Is the Best time to Buy for Anyone

 

Now may be the best time to buy more than ever. Foreclosures are down 11% from last year.  Problematic loans are at its lowest in three years.  This means that the housing market is beginning its long haul towards the healthy and stable market that it once was.  At the current rate of sales, it may take four years to remove all current foreclosures/ delinquent loans out of the market, but with fewer new loans going bad and fewer new foreclosures, the vast spread of great deals is soon to be snatched up.  Here are some factors contributing to curbing delinquent loans…

…More quality loans are being given, making it more realistic for buyers to keep their mortgage commitments.  Loan modifications give homeowners more options in keeping their homes and are becoming more frequent.  Also, fewer new loans are defaulting than in more recent years.  Check out this article from USA Today on this issue.

So, all this being said, there are surely those of you that are thinking about taking your pick while the picking is still good.  If so, congratulations, because it has become easier now that ever to get started.  Lenders have record low interest rates and there are many public resources available to help homebuyers from down payment assistance to closing cost assistance.

A great place to start may be on the Fannie Mae website, Homepath.com.  It is a searchable listing website with many foreclosed properties throughout the country.  This website is particularly helpful to buyers who want to learn more about the options for purchasing a home as well as offering special incentives provided specifically through Fannie Mae.  The most recent incentive for buyers that was offered was for Fannie Mae to have closing costs covered, up to 3.5% of purchase price, and provided not to just first time homebuyers but to anyone who is making a purchase to occupy.  Although this is currently an expired offer there are others.  Whether you are buying your first or eighth home, you can make an offer on a Fannie Mae house within its first fifteen days on the market without investor competition.  Investor offers will not be considered by Fannie Mae until after this fifteen day First Look incentive.  However, for those that are investors, Fannie Mae also offers deals with an unprecedented 10% down payment versus the more common 20% down.

I conducted a quick search for homes in King County, Washington, for 3bd 2ba under $100k and found eight properties, four had the status “under contract” and four with active status.  I tried again with the same criteria and area only under $120k and found 14 with six “under contract”.  The 8 active listings ranged in price from $118k down to $66k!  If you’ve been waiting for a buyer’s paradise, here it is, but for a limited time only.