3 Great Reasons for Selling Your Home Now!

Even if you, as the seller, are taking a loss from what you paid , you are still making out.  Here are three great reasons why:

1. You may be losing as much as 20% of your value on the sale of your home, but the owner of the home you are buying is doing the same thing.  Because you are buying, the savings for you is larger than the loss.  For example, you sell your house for $ 160,000 which originally cost $ 200,000,  this is a $ 40,000 loss ( 20%).  The home you are looking to purchase is $300,000, but the owner paid $ 375,000 when they originally bought it.  They too lost 20%, but their loss is more since it is based on a much more expensive home than the one you are selling, because they originally paid $ 375,000.  They lost $75,000 and you lost $40,000.  Your net gain is $ 35,000.

2. The interest rates are again at New historic lows, so you will get the lowest interest rates ever!  Not only will you buy a home for much less money than the same house cost a few years ago, but the monthly payment will also be significantly lower, too.

3. The level of selling activity has picked up in the past 8 months.  The National Association of Realtors has seen a steady rise in the number of homes sold since the fourth quarter of 2011. This is making it a great time to find a buyer for your home.  Why not take advantage of all these factors and buy a new home now...even if it means taking less money to sell your home.

Andy Williams
President NMLS #118317
Abacus Regional Mortgage NMLS # 113984
484 695 5972

Have any of you purchased your home between 2005-2008?

Many people have bought during the height of the market.  Did you purchase your home with an FHA mortgage, or with some sort of combination mortgage ( 80/20 )?  Perhaps you found 100% financing at the time of the sale.  Either way, I have a mortgage refinance to lower your monthly payments.  The government allotted many billions of dollars toward the HARP program.  Up until now, you may have been told that your home doesn't have enough equity to qualify, or they can't do anything for you due to the combination mortgage attached to your house. This program allows homeowners who have paid their mortgage faithfully, but who haven't been able to refinance and take advantage of the lower interest rates, to refinance into the current interest rates.  They estimate over 45,000 families in the state of Pennsylvania are eligible for this program.  While rates are low, you should contact me for a free consultation and we'll see if the HARP loan is right for you.

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

Can this be the turning point in this Real Estate Market?

      There has been a definite up tick in the level of volume not seen for many years.  Starting in mid-October, the level of new phone calls, pre-approvals, mortgage applications, and closings has increased, for me.  All of the real estate offices I visit weekly have seen a dramatic increase in the number of sales and closings within this same time-frame.  Since the vast majority of my business comes from realtor referrals, I have been the recipient of this influx of new business.  From time to time, throughout the past several years, there are short bursts of activity, only to wane and have home buyers go back into hibernation.  But this time, there is a certain sustenance to this market, the likes of which appear to be just like old times. 
      Each of the past six months, I have seen my personal loan volume increase dramatically from last year, but in most cases, I haven't had this kind of volume in many years.  This reminds me of the mid-90's when we were coming off of a bad market, and things were starting to turn around ever so slightly.  Hopefully this is the bottom of the market.  Although foreclosures and short sales continue to dominate the market, it appears that many other homes are selling too, with multiple offers occurring on some properties.  Perhaps we are over the worst of this.  Better days are yet to come!

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

CAN YOU REFINANCE EVEN IF YOU DON'T HAVE ANY EQUITY?

The answer is YES!  The government just rolled out the new HARP loan.  This program allows people with Good Credit, but no equity in their home, a chance to refinance and take advantage of these low rates! 

Here's how it works: Any homeowner can take advantage of this program if they:

1. Have purchased and settled on a home before June, 2009,
2. Have a Fannie Mae (FNMA) or Freddie Mac (FHLMC) held mortgage,
3. Don't owe more than 105% of the home's value (If home is a Row or a Twin),
4. Don't owe more than 150% of the home's value if the subject property is a (Single),
5. Have not been 30 days late on any mortgage payments,
6. Have a minimum of a 660 credit score.

If you or anyone you know meets all of the above criteria, you or they can take advantage of this program.
The interest rates for this program are slightly higher than normal rates, so you need to make sure that this program will work for you.

If your loan has PMI insurance included in the monthly payment, we need to determine who the PMI insurance company is just to make sure that they are participants in this program.  Participating PMI companies have special rates for these loans where their premiums won't increase over what you are currently paying on your existing mortgage.

Many of the loans acquired during the years of the peak housing prices are combination loans such as: 80/20s, 80/10/10s or 80/15/5s.  As many of you know, this meant that you were given a 1st mortgage, as well as a home equity loan, in order to avoid having to pay PMI insurance.  This refinance WILL NOT include the payoff of any junior liens ( Home Equity loans, Lines of Credit or 2nd Mortgages ).  These secondary lenders will have to agree to Subordinate their liens.  This means that they will have to allow the current 1st mortgage to get paid off with the refinance.  They will have to step back into a 2nd lien position on the property, once again.  Most lenders are willing to do this given the circumstances surrounding the current state of the housing market. 

This loan offers a chance for someone, who were told they can't take advantage of these low rates, to refinance their mortgage and either reduce their monthly payment, or reduce the remaining term of their loan.   You can't borrow any additional money to do any repairs or consolidate bills.  This program is only for those looking to get a better interest rate.  Closing costs can be rolled in to the mortgage to a maximum of 4% of the total loan amount.  This should cover most if not all of the closing costs. 

Please contact me for more details regarding the specifics of this program.

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

Why don't more people listen to me?

I have told you before that you can't believe what you read, unless it comes from what I write, of course.  The word has been going around that FHA would be lowering the amount the seller can pay toward the buyer's closing costs.  Doing this would have a http://blog.american.com/2012/01/five-reasons-president-obamas-mass-refinance-plan-deserves-to-be-a-non-starter-and-two-modest-alternatives/catastraphic effect on the entire housing market.  With the government doing everything they can do to jump-start the housing market, they realize that a change like this could be detrimental to an improving economy.  They aren't stupid!  Just last year there was talk that the President was proposing changes to the conventional mortgages where they would finance only 70% of a home purchase price.  In other words, they were going to require a 30% down payment.  I read this too, but I have been in the business long enough   (4 decades ), that I knew that this would never come to fruition.  This too has little chance of happening.  Rest easy, better days are here, and they will continue to improve.

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

Is this the beginning of the end?

Interest rates rose this past week for the first time in months. With no real apparent reason, we received higher rate increases, sometimes multiple times throughout the day. Whatever the reason, I sure hope this trend doesn't continue. Friday they got better, so I hope with this being an election year, they stay low for at least the next 9 months. Already, there has been an increase in activity, with many more sales compared to last year at this time. The amount of housing inventory, even with the short sales and foreclosures, is shrinking. Good bargains
are going quickly, with multiple offers on some houses. Since the housing
market is showing some signs of improving,we need to keep this momentum going!

Andy Williams NMLS # 118317
President
Abacus Regional Mortgage NMLS # 113984
484 695 5972

IMPENDING FHA CHANGES

There are three major changes being proposed with FHA Mortgages. First, they are proposing changing the up front MIP, which is financed into 99% of FHA mortgages, from 1% to 1.75% of the loan amount. Second, they are increasing the monthly Risk Premium (equivalent to PMI on a conventional loan) from 1.15% to 1.25% of the base loan amount. These two changes are subtle with minimal impact on the borrower's monthly payment. The third, and most significant change, is they are reducing the allowable seller's assistance toward the buyers closing costs. It is currently 6% of the selling price, and now it will be reduced to 3% of the selling price or $6,000, whichever is greater. Since many of the closing costs are fixed costs, it will help the low-end buyer be able to cover more of their closing costs. For example, if a buyer purchases a home for $60,000, they may have closing costs as high as $ 6,000. Under the current system, the seller may only pay $ 3,600 (6%), which means the buyer will have to come up with the difference. Now the $ 6,000 rule will cover all of the buyers closing costs at settlement. Lets use another example for a high-end transaction. Lets use a $ 300,000 purchase. With closing costs being $ 15,000, the old rule allowed too much seller's assist ($18,000). Under the new rule where they are allowed only 3%, the seller is limited to giving $ 9,000. The buyer will have to come up with an additional $ 6,000 to close in addition to their 3.5% down payment. These changes will benefit the low-end buyers, and help stimulate the economy, or so they say. It remains to be seen.

Andy Williams
President
Abacus Regional Mortgage (NMLS# 113984)
484 695 5972
NMLS # 118317