Tuesday, September 9, 2008

KNS Reports: Bailout expected to help, not heal, economy

Bailout expected to help, not heal, economy
By JEANNINE AVERSA and TOM RAUMAssociated PressTuesday, September 9, 2008

WASHINGTON - If the government bailout of Fannie Mae and Freddie Mac is a salve to help heal what's ailing the U.S. economy, it's likely to be a slow-acting medicine that may not stop the infection before it gets worse.

Analysts predict the vicious cycle where housing, credit and financial problems force Americans to hunker down further - hobbling the economy and in turn aggravating those very troubles - won't be easily broken.

"The negative psychology has become embedded and will take time to unwind," said Brian Bethune, economist at Global Insight. "It is not instant coffee."

Many are expecting the government's action will have faster relief when it comes to mortgage rates, however. The national average interest rate for a 30-year fixed rate mortgage dropped 0.3 percentage point to 6.04 on Monday, according to financial publisher HSH Associates.
And the nation's banks saw another immediate benefit -stock prices spiked. Financial stocks overall rallied Monday as the government vowed to invest up to $200 billion in Fannie Mae and Freddie Mac to help stabilize the ongoing credit crisis and the resulting problems in the housing market.

The plan could help banks feel more open to write new mortgages and to refinance existing mortgages at lower rates.


Monday, September 8, 2008

Everything works out in the end

Everything works out in the end. If it is not worked out then it is not the end yet.

Saturday, September 6, 2008

She's so skirt

From Skirt Magazine!
(Click here for the Skirt Site)

Kristin Abouelata - Ray of SunshineBy day, you can find Kristin and her dog, Bear, at Mortgage Investors. By daydream, she’s in Paris or fulfilling her secret desire as a novelist. There’s a little of Hollywood in her blood as well being her daughters are named after Sophia (Loren) and Natalie (Wood) and Kristin’s “sunny-side up” disposition frequently garners Mary Poppins comparisons.

My Rules:
1. Be bitter or better. I have a choice when disappointment sets in, and if I choose to be bitter, my girlfriends can talk about me.

2. Embrace change. As long as death and dismemberment aren’t involved, you have to roll the dice and take a leap. Otherwise, you wake up one day and realize you’re miserable.

3. Don’t burn any bridges.

4. Say you’re sorry like you mean it. It takes years of practice to do it right, but when you finally get it down, you realize a simple act can save you and others a lot of heartache.

5. A good haircut and color are worth the money! Why buy expensive things you only wear once a month when, after all, you wear your hair every day.

Home Loans – Fast, Easy and Competitive
Kristin Abouelata
Mortgage Investors Group/Loan Officer
8320 E. Walker Springs Ln #200
Knoxville, TN 37923
(865) 567-0113 cell
(865) 691-8910 office

Friday, September 5, 2008

Question: "flips"

I have a question on flips, I purchased a new condo at a bank auction last week where the developer lost several new construction homes. I would like to flip it ASAP and list it for 28,000.00 below current appraisal and 23,000.00 below tax appraisal. The home inspection report came back good with just a couple of minor fixes. I'm sure the rule still applies here but I still have to ask your opinion. Also would a FHA loan be the quickest route to a faster sale? I know there are different rules and different time frames for different lenders.

For FHA, the contract has to be dated on the 91st day after you, the seller, purchased it. If the sales price is much higher than purchase price, two appraisals may be required.

Conventional has no limitations as to when it can be sold. However, the UW will want to review the title prior to approval to make sure it is clear.

Hope this helps!


Monday, September 1, 2008

First Time Homebuyer? Give Me a Break!

The Housing Assistance Tax Act, which is a section of the recently passed Housing and Economic Recovery Act, provides some incentives to put the residential housing market back on it’s feet. Are you in a position to take advantage of them?

If you are (or will be) a first time homebuyer purchasing a home between April 9, 2008 and June 30, 2009, you may be eligible to receive a tax credit. Good news, right? This tax credit is kind of like a fifteen year, zero interest loan. Not a bad deal, huh?

The tax credit you can claim is equal to the lesser of $7,500 or 10% of the price of the home. So if you buy a $65,000 home, you can claim $6500. But, if you buy a $85,000 home, you can only claim $7,500. The main catch is you have to pay the credit back to Uncle Sam over the next 15 years. However, it’s interest free. You start doing so the second tax year following your home purchase, so you have a little breather before you start. If you sell your home before you’ve settled your debt, you have to pay it back upon sale. But you won’t owe the full amount of the outstanding credit due if your gain from the sale of your house is less than what you owe.

You have to qualify for the benefit, naturally. And the amount for which you can qualify varies. You have to be a first time homebuyer, as mentioned above (and that includes your spouse if you’re both on the loan) who has had no ownership interest in a principal residence for the past three years (date of your home purchase). You see, in the mortgage world, if you haven’t had a mortgage within this time frame, the fact that you owned and sold a home five years ago doesn’t count. Mortgage Lenders and underwriters want more recent history.

The tax break will not apply to you if you obtained a THDA (Tennessee Housing Development Agency) loan because the thought process is you’re already ahead from receiving benefit of use of proceeds from a tax-exempt revenue bond. In other words, the government’s already given you a deal. No double dipping allowed. You also can’t be a non-resident alien, and you have to keep your home for at least a year to claim this particular tax benefit. So, if you’re transferred and have to sell your home in six months, you’re out of luck.

There is an income cap that must be met for qualifiers. If you’re single, the benefits available start to dwindle if you earn more than $75,000 per year, or $150,000 for joint filers. It’s unavailable completely if you earn $95,000 individually or $170,000 jointly.

So is this deal a good one for you? How could you take advantage of it? Well, again, look at it as an interest free loan. You can put some nice appliances in a kitchen, finish out a basement or do some landscaping for this type of money. So, it can work to your advantage. But make sure you qualify before attempting to take this credit. It’s not the type of thing you want to make a mistake about because filing your taxes is serious business. And if you do qualify and it makes sense for you, spend your money wisely. The ultimate goal is to get this economy moving, so if enough people can take advantage of it, it just may work. It’s worth a try, right?

Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at http://www.kristinmortgage.com/ Home Loans Plain Talk.

Interest Rates: One Man’s Gain Is Another’s Loss

How can two borrowers can buy the same house, and get completely different interest rates? There are multiple considerations to take into account when a lender is pricing an interest rate for a customer……

In the old days, you used to be able to call a lender, give them a note amount and term, and get a quote. Lickety split. Not a lot of questions. Just “boom”, there’s your answer. It certainly made interest rate comparison much easier. But in today’s mortgage lending world, it’s just not that easy.

In fact, say you’ve got two customers buying identical homes in a development. Each customer can be quoted completely different interest rates for different reasons. Even if they have the same credit score. That’s because you’re granted different discounts or assessed with different cost additions for various aspects of your lending profile.

For instance, one guy may be getting a conventional loan, and the other an FHA (Federal Housing Administration) loan. With FHA and a credit score of 620, there are no discounts or additions for credit score that a lender will add to the total price. But, dip below a 620 and there will be quite a pricing differential. With a conventional loan, you’ll get discounts the higher your credit score. Thus, a 620 credit score in the conventional realm does not have as much interest rate muscle as a 720. And there are different cost hits in between for every 19 point differential. Plus, if you have less than a 620, you probably won’t get conventional approval. A typical lender nowadays has to be really good at reading a chart to quote a loan in the conventional world.
Another big factor is loan size. Again, you’ll probably pick up a discount if you’ve got a healthy sized loan. However, if you’re financing a smaller amount, it may cost you a bit. Thank goodness for excellent first time homebuyer programs that let qualified borrowers avoid some of these pricing hits.

Another big difference in interest rates available is the buyer’s intention for the property. If it’s a primary residence or a second home, one gets a better rate than if it’s an investment property. From an underwriting perspective, a borrower is less likely to quit paying a mortgage for a property that is intended for personal use. Statistics have proven this aspect of lending to be quite true. Of course, if it is an investment property, the borrower is going to have to come up with a heck of a lot more money out of pocket anyway. If it’s a manufactured home, you have to reconsider loan programs again. Some programs aren’t available for manufactured homes, and especially if it is a manufactured home that is an investment property. You’ll have to find a lender that specializes in this type of loan.

As touched on before, the type of loan matters, too. Conventional rates are different than FHA rates, which are different than VA rates, which are different than Rural Housing rates. Even for the same house. And again, as mentioned before, throw THDA or another first time housing program into the equation, and you start all over again. Of course, you can’t get a VA loan if you’re not a veteran or the spouse of one buying a loan. And you can’t get a rural housing loan if you’re in the wrong zip code and make too much money. So, at times, your choices are limited for you.

Even if you get the same interest rate, it doesn’t necessarily mean your payment will be the same. If your loan requires mortgage insurance, your monthly premium could differ because of your credit profile.

I guess the best advice is to be patient when considering loan programs and payments. Make sure you explore all your options. And don’t worry about the guy sitting next you. Just keep your eyes open and work with a lender that’s trustworthy.

Let My Experience Work For You!

Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.