New FHA Guidelines!!!!

This is taken from an email alert sent out by Jennifer Tuttle with Allen Tate Mortgage:

FHA now insures about 30% of all new loans and is nearing the limits of loans they can make based on their capital ratio. In an effort to fix this problem, FHA is going to raise their upfront mortgage insurance premium fees from 1.75% to 2.25%.

This will bring more money into FHA thus meeting their Capital Ratio requirements to continue to lend. They also want to limit the high loan to value financing to borrowers with a 580 credit score; a score under 580 will now require at least a 10% down payment. All of the investors that Allen Tate works with will not purchase a FHA loan with a score below 620 so that change will not affect us. From my conversations with other loan officers in other companies, I don't know of an investor that will go below 620 at this time.

The bottom line... FHA loans, which have been the saving grace for so many folks, are now becoming stricter in their guidelines. This may affect your "borrow-ability"! All the more reason to find a home BEFORE April, when these guidelines take effect. If you have more questions or would like a copy of the new mortgagee letter from FHA, please contact me at Amanda.Shore@allentate.com!!

Did You Know????

In the Triad in November 2009, 50% MORE HOMES SOLD THAN IN NOVEMBER 2008. In the US, 42% more sold than in 2008. What does this mean? The first tax credit that applied to first time home buyers worked in stimulating home sales! Economists are directly attributing most of those sales to the tax credit. This is further reinforced by the fact that sales slipped to next to nothing in December (even taking into account the usual December slide from all the festivities). If you are trying to sell your home now, or even contemplating it, what does this mean for you?
You do NOT want to miss the next crucial window. The current tax credit requires that homes be under contract by April 30 and closed by June 30. Do NOT wait until February or March to list your home. If your home is already listed, do NOT wait to get aggressive and proactive about pricing, incentives, etc. We don't know for sure, but what if things fall flat in July like they did in December... what will you do then?

December Stats for Forsyth County

We have just compiled statistics for sold homes in December 2009 -- only 24.67% of the homes that sold in December in Forsyth County were $200,001 and up! 69% were below $100,000. What does this tell us? For those homes over $200k, pricing, condition, and readiness are KEY... call me for helpful insights into getting your home ready and making it stand out from the crowd.

Shadow Inventory... What Does that Mean?

We are hearing a lot these days about "shadow inventory" -- particularly now that the new year has begun. An understanding of this term is KEY for anyone attempting to sell or considering selling a home in 2010! Shadow inventory refers to the vast wave of foreclosures that are currently being processed but have not yet hit the market. All economic forecasts point to these really becoming a factor in Spring and early Summer. What does this mean for you?

Appraisers used to be able to "ignore" foreclosures when they did market valuations because they just weren't the norm -- not so anymore. Foreclosures are now being considered by appraisers as comparable properties simply because of the sheer number of them and because they now infiltrate all price ranges. The more foreclosures with which you are competing, the more your property value is driven down by them. If the number of foreclosures is going to go up and up and up in a few months, we need to do all we can NOW to position your home in the market.

If you have been considering a price reduction but think you should wait til Spring, do it NOW. If you have been considering listing your home but think you should wait til Spring, do it NOW. The longer you wait, the more negatively this shadow inventory will affect you!

Additonally, the extension of the homebuyer tax credit has buyers looking now. The deadline for this is to be under contract by April 30. Waiting til February to list is missing out on a window of opportunity for those buyers looking to take advantage of that credit!