Jude's Real Estate Rumblings

head_left_image

Mortgage Tip

There is some inaccurate information being sent out by a number of lender reps regarding FHA loans.  They are saying that as of October 1, alternative credit will no longer be allowed for FHA borrowers.  That is NOT true.  If a borrower does not have a credit score because they do not have any credit accounts, FHA will accept three alternative credit accounts to establish their payment history.  Typical examples of alternative credit accounts are rent, utilities, a phone bill, cable TV bill, etc.  Using alternative credit for people who do not have credit scores is one of the hallmarks of the FHA loan program.
 
Again, alternative credit is still allowed for FHA loans.  It is not going away on October 1.

www.judesandvallloans.com
0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • September 08 2008 12:53PM

2 million troubled borrowers avoid foreclosure

An article from CNNMoney.com, reports that according to numbers released this week by the Hope Now coalition, they have helped more than 2 million at-risk borrowers stay in their homes during the past 13 months.  The alliance assembled to combat foreclosures fixed more than 192,000 problem loans during July, a one-month record that represents a 6% increase over June.  Faith Schwartz, the alliance's executive director, said Hope Now is stepping up its efforts to reach out to troubled borrowers to let them know help is available.  The group has promoted its program through advertising, public announcements, as well as letters to at-risk borrowers and large foreclosure prevention events that it's holding around the country.  Schwartz said, "Outreach is crucial.  Borrowers have to talk to their lenders.  That's the most important message we communicate."
http://money.cnn.com/2008/08/26/real_estate/Hope_now_hits_two_million/index.htm?postversion=2008082711

www.judesandvall.com

0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • September 08 2008 12:51PM

Good news for Denver-area housing market

An article from the Rocky Mountain News, reports that according to the S&P/Case-Shiller Home Price Indices, the Denver area housing market showed the most appreciation of 20 metropolitan areas tracked from May to June.  The Denver area showed a 1.5% gain in that period.  The report showed the average percentage change in that one-month period was a loss of 0.5% for all 20 cities, and a loss of 0.6% for 10 of them.  Denver homes showed a 4.7% decline from June 2007 to June 2008, the third best of the 20 cities.  David M. Blitzer, chairman of the Index Committee at Standard & Poor's said, "While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level."   Julie Montgomery, a broker associate with RE/MAX Masters Inc. of Greenwood Village, said the key to selling a home in Denver is to make sure it is in perfect condition and shows well.
http://www.rockymountainnews.com/news/2008/aug/26/good-news-for-denver-area-housing-market/

www.judesandvall.com
0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • September 08 2008 12:50PM

Housing authority loans $100M for purchase of homes

An article from the Denver Business Journal, reports that the Colorado Housing and Finance Authority has made more than $100 million in loans so far this year to purchasers of foreclosed homes statewide.  According to the CHFA, as of August 25, some 35% of the mortgages CHFA of Denver has made this year were for homes banks took back in foreclosure, so-called real estate-owned (REO) properties.  Milroy Alexander, CHFA’s CEO, said in a statement, “This is an extremely positive sign for Colorado’s housing market.  Foreclosures have been weighing down the market and created a burden on our community.”  CHFA reported that 93% of borrowers purchasing foreclosed homes so far this year were first-time buyers.  While 42% of buyers were one- or two-parent households with children.
http://denver.bizjournals.com/denver/stories/2008/08/25/daily4.html?b=1219636800^1690051

www.judesandvall.com
0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • September 08 2008 12:48PM

Finding a pulse in local real estate markets

An article from Inman News, reports that when Lauren Guzak, director of strategic relations for Dataquick, was asked about the discrepancies in the national numbers and whom we should believe, her answer was "No one!"  Her point is that the national numbers and even the state numbers may not synch with local market conditions.  In the local market, decreases in inventory and days on market, and increases in unit sales could be indicators that the market is taking steps toward a recovery.  Unit sales are important because they indicate how quickly the inventory is being absorbed.  A decline in days on the market can indicate an improving market.  Some cities are experiencing a decline in days on the market, which indicates that these markets may be improving even though prices may still be declining.
http://www.inman.com/buyers-sellers/columnists/berniceross/finding-a-pulse-in-local-real-estate-markets

 

www.judesandvall.com
 

1 comment • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • September 08 2008 12:45PM

Mortgage Tip

We are often asked how the annual percentage rate (APR) that appears on the Truth-in-Lending disclosure is calculated.  Here's how it's done:
 
1)  In order to calculate the APR, we need to know the principal amount of the loan (the amount the buyer borrows from the lender), the interest rate, the term of the loan, and the closing costs.  Let's assume the loan amount is $200,000, the interest rate is 6.5%, the term is 30 years, and the closing costs are $6,000.
 
2)  First, the monthly payment is calculated by amortizing the $200,000 over 30 years at 6.5% interest.  That gives us a payment of $1,264. 
 
3)  Next, we subtract the closing costs from the loan principal.  However, we only subtract those closing costs that are related to the loan, not the costs that are related to the real estate side of the transaction.  A good example of a closing cost that is related to the loan is the origination fee.  An example of a fee that is related to the real estate transaction is the appraisal because even if the buyer paid cash for the house, they would still want to see an appraisal.  Let's assume that out of the $6,000 in total closing costs, $4,000 of those costs are related to the loan.  So, we subtract that $4,000 from the loan principal ($200,000), leaving us $196,000.
 
4)  The final step is calculating what the interest rate would have to be for a loan of $196,000 in order to give us the same payment of $1,264.  That interest rate is 6.695%.  That is the APR.
 
The purpose of the APR is for the borrower to compare loans between different mortgage brokers.  If each mortgage broker has the same loan amount, same interest rate, and same term, then whoever has the lowest APR has the best deal because they have the lowest closing costs.
0 comments • Jude Sandvall, ABR, CNE, SFR 720-255-1021 • September 08 2008 12:43PM