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March 2008

FHA MAY Allow Financing Where The Mortgage Exceeds The Value

I don't have a lot of information about this yet, because everything right now is preliminary.  That being said, keep your eyes and ears open for a new proposal by the Bush Administration that would allow people with mortgages that exceed the value of their home to refinance.  How the difference in value-ie negative equity would be handled is yet to be determined.   I have talked to many home owners who are upside down.  Rather than a short sale or foreclosure, they want to stay in their home.  At the same time if they had an ARM, they may have a higher payment that can't be refinanced because of the loan to value.  What if you could just refinance what it was worth?  Wouldn't that be powerful!  The biggest question would be how to deal with the evaporated equity.  It will be interesting to see what can be created or if this will die as an idea that just can't be brought to the market.

 

 

 

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The Naked Truth About Real Estate Investing-The Reality Of Buying Rental Property Fully Exposed!

The Naked Truth About Real Estate Investing-The Reality Of Buying Rental Property Fully Exposed!
 
You have heard of Robert Kiyosaki, Donald Trump, and Carlton Sheets to name just a few of the late night TV real estate gurus. Each of these individuals have produced excellent products-books, tapes, and seminars that teach about investing in real estate. If you haven't bought their products-you should. These experts have all been successful buying and selling real estate throughout their own careers and have valuable information to share.
 
At the same time, not every best selling author is in the trenches on a daily basis helping others buy and sell property on a one-on-one basis. Successful investing in rental real estate demands that you adapt quickly to the current environment. Successful investors need to have their finger on the pulse of the marketplace at all times. Too often real estate investing has been made to look too easy and somewhat hands off. The truth is the exact opposite. People need to know that not everyone can succeed at buying and selling property. False expectations will almost always lead to failure. Investors need to hear an accurate and truthful summary of what is involved in owing rental property. It was the need for more truthful and realistic information that led to the creation of this new book.
 
The new book "Reality Based" Real Estate Investing by John Mazzara seeks to shortcut an investor's learning curve and provide a more realistic or "Reality Based" view on building wealth through real estate. John is a real estate broker associate with RE/MAX Associates Plus in Edina, Minnesota and owner of Venture Development-Minnesota's premier mortgage broker. John is an active real estate investor in the Twin Cities, MN. John was recently quoted in Investors Business Daily for his opinion about the current foreclosure and short sale situation as it pertains to existing homeowners. John's book brings 23 years of real life experiences from the trenches. He shares successes AND failures throughout the pages of this book. You will be entertained while you learn. The analysis of today's marketplace opportunities are specific to Minneapolis/St Paul and the Twin Cities metro area. The balance of the book is all about strategies and concepts that are without boundaries. This book will be of value to investors everywhere, regardless of where they live. After reading the book you will be able to determine whether or not you should become a real estate investor.
 
Unlike many books on the subject of investing in investment property, John doesn't tell you it's easy. In fact, he outlines the hard work and gives you a realistic summary of what to expect and what to watch out for. John shares what he perceives are the opportunities for investing in real estate TODAY. Topics covered in the book include: goal setting, tax strategies, holding period options, analysis of a property as an investment, correct property selection, geographic and demographic concerns, lease considerations, 1031 exchanging, insurance policies, options for taking title, appropriate mortgage financing, and the next steps necessary to make it all happen. In essence, you have a blueprint with reference material that can be use again and again over time.
 
The goal of owning real estate is to build long term wealth. We live in interesting times where our country and economy are at a crossroads. Think about the perfect storm for qualified buyers: price compression, fear, and tight mortgage loan financing. I encourage you to review this book as I believe it will prove to be a valuable resource. Let "Reality Based" Real Estate Investing serve as one of your guides on the journey towards financial independence through investing in real estate. Carpe diem!
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FHA Loan Limits Have Been Increased!

FANTASTIC NEWS!!

They have just released the new updated FHA loan limits.  Go to this link and find out what your state and county limit has been changed to: https://entp.hud.gov/idapp/html/hicostlook.cfm For Minneapolis -St Paul and the majority of the Twin Cities area the loan limit for single family homes has just been increased to $365K for single family homes.  Mpls-St Paul are considered hight cost areas-not everywhere in our state are we considered high cost.  This means that going forward, you will be able to finance more homes using FHA financing.  FHA financing is important to borrowers who want to be able to take advantage of some of the unique features of FHA mortgage loans.  More borrowers and buyers will be able to benefit from this great government program. In the Wall Street Journal today, they had an article saying they anticipated that 1/3 of the loans done this year will end up being FHA.  I would estimate it might even be more!  Conventional zero down loans are gone in MN for at least a while.

For example, you can do a cash out refinance up to 95% loan to value. 

You can finance a home downpayment with a gift program like the Nehemiah program-which essentially makes the home 100% financed.

If you had an ARM that had a teaser rate, and you were current with payments during the 2 or 3 year period before it adjusted, you may be eligible to refinance into a FHA Secure mortgage.

You can do a rehab loan combined with an initial purchase loan under the FHA 203K

The FHA ARM has 1/5 caps with annual adjusters of 1%.  Most conventional ARMS are 5/2/5 or 6/2/6 caps with an annual 2% adjuster and a higher margin.

You get a flat .5% MI (mortgage insurance) factor on FHA loans.  Conventional loans vary by down payment and credit score. 

You can do temporary and permanent buydowns off of the interest rate.

There are product changes on FHA reverse mortgage coming too.  They just aren't here quite yet.

These are some of the major differences between a conventional and FHA Loan-there are more.  Call us for more information at 952-285-4319 or visit our Minnesota mortgage website

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