Archive for the 'Julie’s Mortgage Tips' Category
March 20th, 2009 categories: Julie's Mortgage Tips
The market is telling us we need more buyers to buy homes and condos. The rates plus willing sellers is making for some nice deals. You should also be thinking about refinancing possibilities if you plan to stay for two years as the payoff is quite nice. Here are some numbers. You save a lot per month. In two years at 200k you will save $4224 which is much more than the cost to refinance. Refinance Article Earlier on Cost of new loan.
Per 100k of loan your payment of principal and interest at 6% was $600 per month.
Now, at 4.6 % its dropped to $512 per 100k of loan, you save $88 per month
100k-save 88, 200k save $176, 300k save 284 per month
As a buyer your money is just going to go further these days. People with good credit are in the drivers seat as buyers. These low rates will last for a period of time. Then with the government spending over a trillion dollars per year more than they take in the cost of money will rise. I just cannot tell you when its going to happen but know it will happen.
There are a number of developers who need to clear their books of properties that are new or almost new in some great price ranges in Uptown New Orleans. Part of their problem is the slow market and the facts that people cannot get loans for new projects using conventional loans. This this adds to some very nice units that I have not seen before at these prices. There are not massive amounts but they are out there. Check it out!
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Jefferson Parish has several programs that can help you as a first time buyer for a home or condo. You have to be able to qualify for a loan and meet the income requirements. The purchase price has to be below $200,160. You start by getting qualfied for a loan through an approved lender. This will let you know what you can afford and if your credit score is sufficient for a loan. The loan itself can be FHA, VA, or Conventional. Call Julie Baudier at Standard Mortgage to get you started with the loan process 504-583-1793. This is your first step.
The home or condo has to be in good shape and should not need major repairs. Then you call the Jefferson Parish Community Developement Office. They will give you information on the classes and a certificate to get started.
A Real Estate Agent like Eric can then help you in selecting a property. Its well worth the time and effort as its a big, big help in getting started towards home ownership.
As per the Jefferson Parish Website “The HOME Program funds assist first-time homebuyers in purchasing their homes by subsidizing closing costs and/or down-payment requirements in conjunction with loans obtained through the Jefferson Parish Finance Authority or other qualified lenders.
Qualified applicants may receive a level of assistance up to $50,000 determined by Community Development to be applied for the down-payment and normal closing costs. Participants will be required to grant a mortgage to the Parish in the amount of the assistance provided. This mortgage will be for a term determined by the amount of money received, non-interest bearing, and will be non-repayable if certain conditions are met. Eligible participants purchasing homes in the City of Kenner will receive a $10,000 grant secured by a deferred mortgage of 10 years.
Eligible participants include households that have not owned a home during the past three years. The annual maximum allowable household income limits, based on family size, are as follows. The annual income of a family of four cannot exceed $47,850.
1 – $33,500 2 – $38,300 3 – $43,050 4 – $47,850
5 – $51,700 6 – $55,500 7 – $59,350 8 – $63,150
Applicants are required to complete a Preliminary Application with supporting documentation before being funding will be considered.
Applicants are required to attend two classes and must present an acceptable certificate of training completion before loan closing.
The monthly payment required to service the contemplated mortgage(s) may not exceed 30% of the monthly household income.”
You should also be able to get a federal tax credit as well if you buy by the end of the 2009 of $8,000.
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Congress had a great opportunity to really jump start the housing market with a $15,000 tax credit open to everyone and anyone. Its hard to believe they thought it would cost too much. This move could have saved people tons of money and would have helped us with the bank bailout. Any incentive to increase demand is welcome.
I would have made it very simple and open to everyone buying a home or condo. Why put all these strings attached when we need to increase demand. It would lighten the load on sellers and banks costing American less in the long run. Incentives do work and when we need immediate spending this is the fastest way to make it happen. Much less than the bailout of Citi Bank alone by 10’s of billions. Where are the Nation’s thinkers?
However if you fall into this niche its something to take advantage of. Its like free money along with the tax advantages of owning.
“The good news is that there is an $8000 tax credit available for first time home-buyers! On Friday, both the House and the Senate passed the American Recovery and Reinvestment Act of 2009 and President Obama is expected to sign it into law early next week.
$8000 tax credit highlights include:
- The $8000 tax credit is available only to first-time home buyers, no purchase in last 3 years.
- The $8000 tax credit is available only when the first-time home buyers buy a primary residence
- The $8000 tax credit is available only to first-time home buyers buying a primary residence between January 1, 2009 and December 1, 2009
- The $8000 tax credit does not require repayment after 3 years.
- The $8000 tax credit is claimed on a tax return and reduces the tax liability. If the credit is more than the tax liability, the unused credit will be issued as a check to the person claiming the credit
- If you sell the home within 3 years, the entire $8000 tax credit is recaptured
- Income limits of $75,000 for one and $150,000 for a couple.
For those of you who have been asking questions about the possible tax credit – the good news is that we now know what has been passed into law.
What this legislation should do is encourage first time home-buyers to buy a condo or home. What it will probably not do is encourage everyone who isn’t a first time home-buyer to buy a home.
And it remains to be seen exactly how much it will help the overall real estate market turn around.”
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Rents in the Uptown New Orleans and the New Orleans Warehouse District are $1200- $1800 monthly. Instead of paying rent for the next four years college students parents can buy a condo as a 2nd home and reap the benefits. Some parents will be able to use the interest paid on the 2 nd home to lower their tax obligation. Buying in today’s market while values are down should equal appreciation 3- 4 years from now. Rates are at an all time low and its nice to be able to take advantage of it. 2 nd home rates are as low as your primary residence rates. For more information feel free to give me a call. — Julie Baudier
Julie has helped me on many occasions to run the numbers and give you ideas on the notes, taxes and tax savings ideas of owning. Many people will buy a condo for their kids to stay in while in school and keep it as a second home after graduation. Once the kids are gone it is like finding gold in your yard until they come back home. But then its much cheaper as they are just visiting ! Kids are wonderful but can get expensive.
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Banks and lenders have been increasing the scores needed to get the best rates on loans in 2009. The lower credit scores will make the loan more expensive via a higher rate and or higher charges. If your score is below the threshold you may not be able to get a loan at today’s lower rates.
This means it a great idea to check your credit score out while you are still in the early stages. A higher percentage of credit scores are wrong than you would think, so checked out early and get it fixed. There are ways to make your credit score go up by reviewing your open lines of credits and mistakes which may not be yours.
The best way to see a drop in your score is not to pay your bills on time. You may be a nice person but this does not count with credit scores.
I would have your future lender pull your scores and go over them very, very early in the process so you will not have any surprises.
I had a client who had great credit until someone opened up various lines of credit for him while he was busy working hard off shore. He had no idea as the bills were sent to a vacant lot. He then found loans, bank accounts, and bills he knew nothing about that had been set up under his name. The story ended quickly when the client could not buy anything for least 6 months while he cleared it up. It may not be this major but all the points count.
I had the opportunity to talk to Robert Tynes a loan officer with Whitney Bank in Metairie this past week. He gave me some of the basics: Your credit score and the down-payment are very important in figuring your interest rate. The rules are changing rapidly as to who will get the lower rates that are now being advertised.
Scores of 740 or more will get the best rates and will have no extra charges. The bottom scores for a conventional loan are in the 620 range with a decent down payment. The interest rates become a sliding scale from 620 to 740 as to an increase in rates. He also said the rules are changing rapidly so you need to keep updated and start the process early.
He is doing more FHA loans as the scores are in the 580-600 for the one rates for FHA loans. The down payment is around 3% which is a big help if you do not have a lot for a down payment. With this loan the seller can also help you with your closing cost to a certain degree. Gets complicated but that is why getting the loan process started early is more important than ever. Shopping rates is not easy when you do not know where you stand. Just be aware that many quotes are just teasers to get you in or to call.
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New Orleans Interest Rates fall to lowest level in 37 years, Time to refinance? Get out you calulator ! Save some Money
It is certainly time to think about saving money by refinancing your loan on your New Orleans condo. Especially if you plan on owning it for more than a couple of years. The cost to refinance your loan on a 200k mortgage for a condo is about two thousand dollars. The only variable is the title Insurance which varies with the amount of the loan. Make sure you keep your title policy as the reissue rate is a big savings. Its is well worth looking into the numbers. Your condo fees and taxes stay the same.
Lets look at some numbers. If your current rate is 6.25% and you can get 4.75% then your monthly payment per 100k drops from $616 to $521 which saves you $95 per month. This is principal and interest. On a 200k loan your savings would double to about $200 per month. That is $2400 per year which is over the break even point for the closing cost associated with the lower rates. So if you are planning on staying in New Orleans its money in your pocket.
There is no way to know how long these rates will be around but have a feeling it may be a couple of months before heading up again. If you are buying this gives you a larger budget to spend or a much cheaper note. There is still available those seasonal discounts that will be going away once everyone figures this out.
Feel free to call Julie Baudier 504-583-1793 and ask her what you need to do and how it will benefit you. Its not always that easy to get $200 more in your pocket by making a call. If your rate is higher then you save more. You must have good credit, but 95% of my buyers have had excellent over the past 3 years had great credit in my condo markets. Out of last 200 sales I had one sub-prime loan and only a couple of adjustable loans.
The other odd thing when you do the number is with the lower rate of 4.75% your principal is getting paid down $126 per month. At the 6.25% rate the principal is being lowered by only $95 in the first months. I had to do this several times to be a believer. This means you are building equity faster at a lower rate as less goes to interest in the beginning. An equity bonus so to speak!
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December 14th, 2008 categories: Julie's Mortgage Tips
Rents in the New Orleans Uptown and Warehouse District are approximately $1200-$1800 monthly. Instead of paying rent for the next four years college students parents can buy a condo as a 2nd home and reap the benefits. Some parents will be able to use the interest paid on a 2nd home to lower their tax obligation.
Buying in todays market while values are down should equal appreciation 3-4 years form now. Rates are a an all time low and its nice to be able to take advantage of it. 2nd home rates are as low as your primary residence rates. For more information please give me a call. Julie Baudier 504-583-1793
Julie is correct about the second home market and the deductions and enjoyment that can be had with a second home. I sell several condos a year where people will have a condo as second home and also make it a home for their kids while in school. Having the second homes have had a positive effect giving the market more buyers than other markets.
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I was talking to Julie Baudier, my favorite lender today about the drop in interest rates and the effect it would have with people looking to purchase a new place. Its never too early to get an idea of what your note will be and what kind of payment you will be comfortable with. Doing this upfront is aways a good idea and great first step. If you are looking in the Spring this is the time to start learning about the market and the lending process. This is especially true of first time buyers but still true for experienced buyers.
Julie says “Six weeks ago a client signed a purchase agreement for $260,000 he was borrowing $208,000. We locked him in at a rate of 6.25% his Principal and interest payment was $1288.00. I lowered his rate today to 5.375% and his interest payment went down to $1174.00. His payment is now $114.00 lower than he originally panned. Lower rates save you money and increase the amount you can afford to but.”
Here are a couple of tid bits that we often forget to figure into the purchasing equation. Your home or condo is an investment and it nice to know some of the numbers.
An easy way to remember is that each quarter of a point will mean a drop of about $16 per every hundred thousand that you are borrowing. Another factor that many forget about $100 of your payment per 100k goes to pay day the balance of the loan in month one. This is building equity that you will not get renting.
The effective rate will be much lower when you add in your interest deductions. The higher the income the bigger savings. For example if you borrow 200k and you are in the 25% income bracket at 5.5% you payment is $1126 without escrows. Your interest is about $930 a month of when 25% or $372 is a tax break.
Your effective payment quickly becomes $1126 minus $372 tax break minus equity $196 or $584 per month. Of course you figure taxes and condo fees into your equation. Any appreciation is going to be tax free for most people.
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November 7th, 2008 categories: Julie's Mortgage Tips
For most of my condo buyers this means little unless you are going to borrow more than $417,000. Borrowing more would put you into the jumbo rate category which is a lot higher rate in today’s market. If you buy something for 500k and borrow 400k you would then get a conforming loan.
CONFORMING LOAN LIMIT FOR U.S.
TO REMAIN $417,000 IN 2009;
DIFFERENT LIMITS IN SOME AREAS
WASHINGTON, DC – “The Federal Housing Finance Agency (FHFA) today announced the conforming loan limit will remain $417,000 for 2009 for most areas in the U.S. but specified higher limits in certain cities and counties. The conforming loan limit is the maximum size of loans that Fannie Mae and Freddie Mac can purchase in 2009.
According to provisions of the Housing and Economic Recovery Act of 2008 (HERA), the national loan limit is set based on changes in average home prices over the previous year, but cannot decline from year to year. Loan limits for two-, three-, and four-unit properties in 2009 will remain at 2008 levels as well: $533,850, $645,300, and $801,950 respectively, for homes in the continental U.S.
The national limit was left unchanged at $417,000 based on declines in FHFA’s monthly and quarterly house price indexes over the past year. The monthly purchase-only index declined 5.9 percent over the 12 months ending August 2008, and the quarterly all-transactions index dropped 1.7 percent from second quarter 2007 to second quarter 2008. Virtually every other measure of house prices has also fallen, with many showing even larger declines. FHFA has not yet determined whether it will continue to use a currently existing FHFA price index to gauge price movements in future years. For this year, however, all reliable metrics point to lower prices, and a price decline of any size is sufficient to determine that the national limit will not change. ”
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August 12th, 2008 categories: Julie's Mortgage Tips
There will be a new issue for Louisiana State Bond Assistance coming soon. The new issue should come out in the end of August and early September. I will send a new blog when the information becomes available.
There is also the federal Tax credit that is also avaiable for people buying in the next 9 months. It is up to $7500 if you have not owned a home in the last 3 years. This is a tax credit that may work for you. You pay it back over 15 years or unitl you sell the property. Its better to have $7500 now, its like an interest free loan.
There is always rules for the programs but I have had at least 10 people in the last year take advatage of the various Bond issues. The early birds get the best photos like I did early one morning and you can do the same by being informed in advance of a major decision such as buying a home or a condo.
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