The FHA 203k mortgage program has become in demand with the recession in the housing market. When a property is owned by the financial institution, chances are that the property may be in need of a little work and the FHA 203k loan is a great option. Some of the frequently asked questions we see about the FHA 203k mortgage program include:

What is the Arizona FHA 203k mortgage?

The FHA 203k mortgage program in Arizona is a restoration loan that works much like a development loan. The one who is buying the home is able to pay for a home that is in need of repairs and is able to finance the repair work in the mortgage to correct items in the house. The FHA 203k consists of the purchase price of the home plus the construction costs for the work to be performed after close.

An Example Scenario:

$100,000 purchase price of home
$20,000 Repairs Needed (see a list of the most common FHA 203k repairs)
$120,000 Total Loan Amount

How much do you write the contract for a FHA 203k sales contract?
The offer is the purchase price of the dwelling only. You don’t need to include the cost of repairs anywhere in the sales contract or offer. In the above example, the purchase price on the sales contract or offer would be $100,000.

Is it easier or harder to qualify for an FHA 203k loan vs. a regular FHA loan?
The requirements to qualify are the same as a traditional FHA loan. What does it take to qualify for an FHA loan? Generally speaking, a credit score above 620, a good job and a down payment of 3.5%. Of course there are more details to being qualified, but those are the general highlights.

How do I go about finding the right contractor for the work?
It is advised that you work with a general contractor that can perform all needed repair work. Your loan officer can easily help recommend one – they should know at least one good contractor. It is also imperative that the contractor be practiced in FHA guidelines so that they can include any FHA required items in their contract.

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There are many questions surrounding a decision between doing a short sale on your home or waiting for a foreclosure to occur.

Which is better for you as a homeowner?

Kevin Hardin explains to us exactly what some of the differences are, and you may be shocked. A short sale is almost always better for the home owner than a foreclosure and you can control your outcome a lot better if you are in control of the situation.

Kevin Hardin and his co-workers at Thomson Law advise thousands of home owner a year on the differences between a foreclosure and a short sale  and as Kevin explains maybe 1% of the time a foreclosure is the best alternative.

If you are looking to do a short sale  and want to consider your options make sure you check out this video because many of the questions you have will probably be answered. Just because the bank may not have the right to come after you in a lawsuit does not mean they will not try. And if they do try, you may win, but it is not going to be a cheap win. With a short sale  you get to determine the ground rules and only have to agree to it if you get acceptable language negotiated with the bank.

As always make sure you talk to an attorney and your CPA about your situation as your situation may vary from other cases.

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Now just hang on here a minute! Are these arguments really appropriate? Will they be convincing? What favorable reasons were taken into consideration? Did both the Pro and the Con side get considered? The advantages do not seem to have been entirely considered.

Possibly that needs to be reconsidered. Let’s just take a look at 5 factors in favour of taking steps to applying for an Arizona refinance through the streamline program and reassess them.

Initially, this version of the Arizona Refinance does not require an appraisal. I hear what you’re saying when you point out that so many of us are upside down in our equity. I gladly concede that’s a valid point. However we have to also look at this, the FHA Streamline Refinance lets us get that new loan and get into some of these  low interest rates. To top it all off, one must consider that this also saves you about $450 for not having to buy that silly appraisal.

Second, when applying for this Arizona Refinance you do need to show a source of income, but not an amount you actually earn . That is because if the amount you earn now is different that it was when you got your original FHA Loan, it’s not part of the qualifying process. One of several results of this is that even if you are unemployed, as long as you can prove you are earning unemployment, you will qualify. This makes qualifying for the FHA Streamline Refinance way easier.

Third, there is less work, less processing, less underwriting, less costs and a whole lot less stress.  And also you’ve already qualified for the FHA Loan once. So as long as you have maintained a decent credit profile and still have a source of income your original qualifying carries over into your new Arizona Refinance!

Fourth, we’re able to get discounts for this Arizona Refinance from Title, Escrow, the Lenders and even on our processing. And for larger loan amounts, there may be an option for us to cover all the closing costs.

Fifth, you get to skip a payment. After you do the Arizona Refinance, your first payment will be due on the 1st of the month that is at least 30 days in the future.

Consider each of those reasons in turn, think about how they have an impact you. Those points strongly suggest that you ought to seriously consider researching ways to apply for an Arizona refinance through the streamline program.

Just consider it for a moment. Those same factors have persuaded a good many others, don’t they persuade you as well to apply for an Arizona refinance through the streamline program?

Find out how to apply for the Arizona refinance streamline program at this Academy Mortgage site at az-refinance.com.

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44 Monroe has 8  levels of secured parking, a pool and spa on the eighth floor with gorgeous mountain and downtown Phoenix views. Other amenities include a fitness center, business center, community center and conference room.

The reason that this is interesting is it wasn’t all that long ago when 44 Monroe was headed into foreclosure and the hopes of having “affluent condo dwellers” were going down the drain.

Since the units were on hold for a period of time while the financing problems were sorted out — does this mean that people will be back to buy?

Probably.

Only at a much lower price than they were a year ago.

And with several of the units at 44 Monroe showing that they have recently expired in the MLS or were changed to “temporarily off market”, this market is in flux. Pricing used to range from the 300’s to over $2million.

But with the first of its kind coming out of financial troubles, it will be interesting to see what the new pricing looks like.

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1.  Mortgage Rates Go Down:

Whenever interest rates go down, people rush to refinance — that is until recently… most people who refinance for this reason have already refinanced here in Arizona. The lower the interest rate on your mortgage, the lower your monthly payment — and the less interest over the life of the loan that you pay.

2.  Lower Payments:

In addition to lowering the interest rate on your mortgage, another way to get a lower monthly payment is to increase the loan term. By going from 15 years to 30 years, you can lower your payment.  You can also refinance out of an FHA loan into a conventional loan to get rid of mortgage insurance — which is another way to lower your payment.

3.  Get A New Mortgage Program:

The most popular thing to do when switching mortgage programs is to go from a fixed rate mortgage to an adjustable rate mortgage.  There are other reasons that people switch from one program to another, but this one is the most common in today’s environment.

4.  Debt Consolidation:

If there is sufficient equity, sometimes paying off consumer debt by combining all debts into one lower monthly mortgage payment can significantly reduce the short-term deficits in a budget.  However, it’s important to keep in mind the total cost of that debt by adding it into a 30 year mortgage payment.

Are you in a situation where you don’t know if refinancing makes any sense in your situation? Be sure to call us to find out.

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It takes a special company to really understand luxury home construction. In the past few years as I’ve been involved within the real estate community in the Phoenix area I’ve had the opportunity to speak with a few luxury builders.  So far no one comes even remotely close to the quality offered by Casas del Oso, a custom luxury home builder in Scottsdale, Arizona.

A while back I had a chance to tour one of their homes and it is nothing short of amazing. The craftsmanship, care and passion poured into every single home they build is outstanding. Barry Smith, the man behind each home, has a keen sense for the romantic architecture of Spain, Italy & Mexico and he builds the homes to meet your lifestyle.

Since Casas del Oso is a designer and builder everything is overseen by Barry and his crew. This arrangement means that nothing gets missed – from the type of nails used to ensure authenticity to the details of project management – everything is managed to perfection. The client doesn’t have to worry about a single thing.

After the tour, Barry took me to his office and discussed all the details of the operation. I could just see the excitement and passion in his eyes as he showed me the pictures of the homes they’ve built and the plans for the new homes they would be building.  I never thought anyone could really be that passionate about home building but apparently I was wrong. Barry is very passionate about his work!

I walked away from the tour with a keen understanding that serving the client is at the heart of every home built by Casas del Oso. This company is not driven to making assumptions about what the client may want or telling them what they should want. They are all about making sure the home is truly customized to the clients expectations, desires and lifestyle. These homes are truly a work of art.

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• Casas del Oso – Luxury Custom Home Builder in Scottsdale, Arizona (azmortgageguru.com)

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Now that subprime loans are a faint memory of the past, we often look to the FHA loans to fill in the void. Not that we miss those ugly sub primes all that much. But alas, FHA does provide a hearty loan for those who may have had a shaky credit past.  So, here are a few fun facts and figures on the famous FHA loan.

1)  You do not have to have perfect credit to qualify for an FHA loan! Yes, this is great news. In fact, even with a bankruptcy or a mortgage late, it is easier for you to qualify for an FHA loan than a conventional loan.

2)  FHA loans have a low 3.5% down payment. This money can come from a family member, an employer or even from a charitable organization as a gift. Most other loan programs do not allow this unless you have a much larger down payment or 5% of your own money invested.

3)  FHA rates are competitive! Believe it or not, because the Federal government insures these loans, they offer comparable rates. Your rate won’t be sky high if you opt for FHA instead of a conventional mortgage. The government makes sure of this!

4)  FHA helps you stay in your home. This may have sounded funny a few years ago. But today this is extremely relevant! The FHA has been in place since 1934. They want to protect the folks who have bought. FHA has various options to help keep you in your home should you run into difficulties and to help you avoid foreclosure in the long-run.

5)  You can buy or refinance various types of new or existing homes on an FHA loan: A one-unit, single family home; a duplex, triplex or four-plex; a condominium unit or even a manufactured home (provided the manufactured unit is on a permanent foundation). Sorry, no houseboats as of yet!

6)  Finally, for qualified buyers FHA mortgages are assumable!  This means a buyer of your home may take over your existing mortgage if they qualify.  This may help you sell a home with an FHA mortgage down the road if interest rates have gone up.

So, there you go. A few little details on the famous FHA loan.  Most likely tidbits you have heard before, but worth remembering for the day you may choose to use an FHA loan.

HUD’s internet site provides plenty of additional information. I also suggest talking to your realtor about their experience with FHA clients.  And, if you want to see if you qualify for the FHA loan, just give Mike or me a call. We can let you know in no time!

photo credit: Kamal H.

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Don’t be afraid,
I know you are looking for Jesus
Who was crucified.
He is not here!
For He has been resurrected, just as He said

Matthew 28:5

Have a great time with family and friends on this joyous occasion.

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Here is how you can qualify if you are delinquent(or 60 days past due) on your mortgage:

• You must have lost your job, suffered a pay cut or face higher mortgage payments.
• You must meet the strict financial hardship guidelines of Fannie Mae or Freddie Mac
• These guidelines mandate you fully document your income with pay stubs, tax returns and sign an affidavit attesting to “financial hardship
• You need to go for counseling if your total household debt — including auto loans, credit cards and alimony — totals more than 55% of your income.
• Your homes unpaid principal balance can not exceed $729,750
• Have a Fannie or Freddie Mac loan (call your loan servicer to find out)

For those who are upside down on their mortgage the government will help refinance the loan in an effort to lower payment and make the home more affordable. Uncle Sam is willing to lend as much as 105% of your home’s market value. Now, I’m not sure how many people can benefit from this because many people are way above that level these days. Especially in the Greater Phoenix Metro area. The best way to start the process is by calling your mortgage loan servicer. They are the ones that will decide whether you qualify or not because the government has given them a financial incentive to help you.

Here are some additional things to consider (from the NYTimes):

A mortgage lender or mortgage-servicing company would first receive cash incentives to modify a borrowers’ loan so that the monthly housing payment declines to no more than 38 percent of the family’s gross monthly income. At that point, the government would match, dollar for dollar, the lender’s cost in reducing the payments as low as 31 percent of monthly income.

The reduced payments could come in the form of a lower interest rate, longer mortgage term or a reduction in the principal outstanding loan amount. The lender would have to make a calculation on whether its cost from reducing the monthly payments, after accounting for the government’s cost-sharing, would be less than the costs it would incur from foreclosing on the house.

The guidelines indicate that a lender would have to make the loan concessions if the subsidized cost of doing so would be lower than the cost of foreclosure. The decision would become voluntary if the estimated costs of the concessions appeared to be higher than the cost of foreclosure. If the lender decided not to offer the modification, such as in the case of a borrower who had become unemployed and whose income had largely disappeared, it would be required to examine alternatives to foreclosure before seizing the house.

The program will run until Dec. 31, 2012.

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Looks like Fannie Mae is about to change this. According to the WSJ:

Fannie Mae is finalizing a national policy that will allow tenants to remain in their homes even if their landlord goes into foreclosure — a landmark decision for tenants.

The policy will be in effect Jan. 9, Fannie Mae said Sunday, and reflects growing pressure on the mortgage company from a legal-aid group that threatened to sue over recent evictions. The company said it will also ensure its current holiday moratorium on new evictions is being followed until the new policy takes effect.

I’m sure this policy will not remain in the books forever, but in the future though, lenders should at the minimum inform the tenants within a reasonable time period that the landlord is facing foreclosure. The landlord gets to know the credit worthiness of the tenant so its only fair that the tenant has some foreknowledge of what may be coming.

What do you think? I know a lot of you have investment properties. What is a good way to make this situation a win-win for all in the future?

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