Arizona Mortgage Guru

Its hard to believe but 2009 is almost half over. So, just out of curiosity I took a look at how interest rates have done for the first half of this year. What becomes apparent as you review these charts is that rates fell for a great portion of the year but have been on an upswing of sorts recently. Of course no one knows what will happen in the future but it is important to remember that mortgage interest rates remain at historically low levels.

Data source: Freddie Mac Weekly Primary Mortgage Market Survey

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AMG Note: We don’t normally do a lot of guest posts on this blog. However, when Kat Sanders contacted me and asked I felt it was worth a try. So, here is one of her first posts.

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FHA loans are some of the most sought-after loans when people are planning to buy a home, more so now because of the fiasco that happened with the sub- prime market. For the uninitiated, a Federal Housing Administration (FHA) loan is one that is administered by the federal government for people who fit in the low income bracket. The FHA does not actually give out the loans; it only insures the loans provided by private lenders.

FHA loans are perfect for those who are buying a home for the first time and don’t have too much money to offer as down payment. It also helps that monthly installments are not too high and that they do not fluctuate beyond one or two percentage points (if you go in for an adjustable rate loan).

The FHA Construction/Rehabilitation 203(k) loan is available if you want to buy an existing home and perform any renovation work on it or add to the existing building. The FHA does not insure loans for building new homes, ones where you want to buy the land and secure finance for the materials, labor and the design. However, if you are planning to build a new nursing facility or a home for the aged and infirm, the FHA 232 loan allows you to borrow money for the construction costs.  You can also take out a loan to buy an existing facility and renovate or improve it.

If you are looking for a way to build a new home with an FHA loan, you could apply for the 203(k), buy an old house, tear it down completely, and then build the house of your dreams. If not, you’re better off choosing a construction loan offered by private lenders, or you could go in for the HomeStyle loan offered through lenders who are approved by Fannie Mae.

By-line:

This article is written by Kat Sanders, who regularly blogs on the topic of construction management degrees at her blog The Fixer-Upper Blog. She welcomes your comments and questions at her email address: katsanders25@gmail.com.

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Note:  Some hyperlinks were added for editorial reasons.

Recently the FHA revised some of its guidelines and announced that they would allow first time home buyers to apply the $8,000 tax credit to offset the costs associated with obtaining FHA mortgage financing.

Heather Barr over at The Phoenix Agent blog has a great blog post detailing all aspects of this provision. For one thing you can use the $8,000 to cover closing costs, include additional cash down payment and any mortgage interest rate buy-down costs. Notice you can’t use these funds to cover the required 3.5% down payment. Read Heather’s post for additional details.

Here is a portion of the HUD announcement for those interested:

WASHINGTON - Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today’s action will help stabilize the nation’s housing market by stimulating home sales across the country.

Both the US House and the US Senate passed a bill to restrict credit card practices and eliminate sudden increases in interest rates and late fees.  Here are some of the major provisions of the bill and how it will affect you (via boston.com):

• Creditors cannot increase the annual percentage rate (APR) during the first 12 months of opening up an account.
• Creditors are required to provide consumers with a 45-day advance notice of changes in rates and significant contract changes. Rates that change due to a change in the index that the rate is based on are excluded from this 45-day notice requirement.
• Promotional rates need to be in effect for at least six months from the beginning date of that promotion.
• Creditors need to provide a 30-day advance notice of an account closure.
• With certain exceptions, credit card issuers are prohibited from charging a finance charge based on the double billing cycle method.
• Creditors are prohibited from charging a fee on an outstanding credit card balance at the end of the billing period if the fee is attributed to the interest accrued on an outstanding balance that was fully repaid during that preceding billing period.

Read the full summary of provisions.

As of this blog post the President had not signed it but he has promised he will.

Happy Birthday Dear Aimee!

Wife, partner and friend I am truly blessed to share this journey with you!!!

And also in English:

May the next year be even more amazing than the last!

I am not an expert on homeowners insurance and certainly do not play one on T.V. However, as a mortgage professional I am oftentimes faced with the situation of having to either recommend a good agent who can help the borrower or provide feedback on a “deal” the borrower has received. I decline to express a view on something I am not very familiar. However I will instead pass the borrower on to one of my trusted agents.

What I do find though is that borrowers are ill prepared when it comes to selecting the right homeowner’s insurance policy. This is most often the case with first time home buyers. To be fair, understanding the details of a policy can be quite confusing.  It is for this reason that we had our own insurance agent write a post here on AMG a few years ago to help readers better understand the nuances of a robust policy.

Today while doing some searches I found a very good guide on how to save money on these policies at the Pueblo, CO Federal Citizen Information Center website. They list twelve ways you can save money on your homeowners insurance. I have listed the twelve ways here, but to get the full picture I suggest you head on over to their site:

1. Shop Around
2. Raise Your Deductible
3. Don’t confuse what you paid for your house with rebuilding costs
4. Buy your home and auto policies from the same insurer
5. Make your home more disaster resistant
6. Improve your home security
7. Seek out other discounts
8. Maintain a good credit record
9. Stay with the same insurer
10. Review the limits in your policy and the value of your possessions at least once a year
11. Look for private insurance if you are in a government plan
12. When you’re buying a home, consider the cost of homeowners insurance

While this can be a good guide, nothing beats talking with a homeowners insurance professional. If you need some pointers don’t hesitate to contact me. I have a few I can highly recommend.

In an effort to build more of a community around this blog, I’ve implemented Google Friend Connect. So, if you look at the top of your screen you’ll see a blue bar. On the left side there is a “join” button. Feel free to join the Az Mortgage Guru community. Here is a screen shot:

If you’re reading this in a reader it’s time to take a quick visit to AMG and join the community. I’d love the opportunity to enrich your online experience with this site.

In case you’re no sure what Google Friend Connect is here is a quick video explaining its features.

Also, if youre curious about how you can have on for your site click here.

The Federal Open Market Committee met today and decided to keep the Federal Funds Rate between 0% and 0.25%. Below is a quote from a very good analysis on Businessweek:

The FOMC stuck to its target range for the federal funds rate at 0% to 0.25%, and signaled that rates are likely to remain at exceptionally low levels “for an extended period.” This reference stopped short of giving a timeline of 18 to 24 months for the current policy, as anticipated by some market participants.

So, money will remain cheap for the immediate term. This doesn’t necessarily affect mortgage rates but the heavy government involvement in the mortgage market ensures that mortgage rates will continue to remain low as well.

We had a fun time yesterday evening at Bling Night. It was a social event organized by Joe and Jenn Maggiorie on one of Joe’s property listings up in Scottsdale. I had never been to an event like that before and had in fact no idea what a “bling night” was. It wasn’t hard to figure it out once we got there though. There was live music, an open bar, great food, door prizes and some awesome people. The connections we made certainly made the evening very special. So, a very special thank you to Joe and his lovely wife Jenn for inviting us.

Here is Joe welcoming everyone to the event:

As I mentioned earlier the property we were at (25940 N 115th PL, Scottsdale, AZ) is one of Joe’s listings. It’s a beautiful house with some great views. Here is Joe introducing the property.

I did take some shots before it got dark:

Brief snap of the rest of the evening:

If you want to get in touch with Joe about this property, feel free to do so. I on the other hand look forwad to connecting with Jenn, who has her own marketing consulting business where she helps companies adopt the use social media.

Hope you’ve been enjoyed the series on loan modifications. This is final (sixth) in a six part series on loan modifications written by Morgan Brown at Blown Mortgage. Please be aware that I can not help you with loan modifications. You should contact your loan servicer or a local mortgage company which specializes in loan modifications if you are seeking assistance. The Arizona Mortgage Team blog has information for those who are in the Phoenix, AZ market.

Part 6 of 6

Finalizing your loan modification

Congratulations! Your loan modification is almost done. Here are just a few tips to wrap up the process.

You’ll receive a loan modification packet from your bank that looks very similar to loan documents. Review them to ensure the following terms are what you agreed to:

• Interest rate
• Interest rate reset cap
• Term of modification (how many years)
• Monthly payment
• Good faith payment due
• New principal balance of your loan

If all of these are in good shape you’ll need to:

• Sign the documents in the presence of a notary
• File a copy for yourself
• Wire good faith payment funds to the bank via the wiring instructions they provide (they will not accept a personal check)

Once that’s all done your loan modification is complete. Congratulations! You made it.

Stay tuned to this blog for more great real estate, mortgage and loan modification advice. Thanks for reading and please share this series with friends and family who may need this help.