LOANS WITH RENOVATION MONEY FOR OWNERS AND INVESTORS

In the past, the only way you could get renovation money was with an FHA (Federal Housing Authority) loan, and you had to be an owner occupant.  But that is all changed now with the announcement of the new HomeStyle Renovation Program being offered by Fannie Mae (Federal National Mortgage Association).  The new loans are available to owner occupants as well as investors, government institutions and non-profits, which opens up an entirely new facet to real estate investing.  You can use the HomeStyle Loan to make a new purchase or you can even re-finance your current home to make improvements that increase the value of your property.

Renovation/repair costs up to 50% of the “After Completed” Value of the property are allowed, and there is no minimum dollar amount for repairs.  Even luxury items such as pools, spas, etc, are included on this new way to finance home improvements.  Any item that adds value to your property and is permanently affixed to the property is allowed.

There are many programs available with terms differing for owner and investors, and in all cases a licensed contractor that is approved for the program must be used.

For more information, please visit Fannie Mae’s website: 

https://www.fanniemae.com/content/fact_sheet/homestyle-renovation-factsheet.pdf

IMPORTANT INFORMATION ABOUT FLOOD INSURANCE

What is happening with flood insurance?  This is a common question and one that has prompted several of my clients to avoid homes in areas that may require flood insurance.  A few years ago, there was a huge scare that flood insurance costs were going to rise so high that many people would be in danger of losing their homes, just because they couldn’t afford to pay the majorly increased flood insurance that was looming.

The National Flood Insurance Program came to the rescue.  The National Flood Insurance Program (NFIP) aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations.

However, the NFIP is scheduled to expire on September 30, 2017.  Unless Congress acts to extend this program, flood insurance costs may rise substantially.

Now is a good time to let your Congressman know your thoughts about flood insurance.

For more information on flood insurance and NFIP, you can go to their website:

https://www.fema.gov/national-flood-insurance-program

CREDIT 101 DO’S AND DON’T’S TO START THE NEW YEAR OFF RIGHT!

We all depend on our credit when we want to make purchases, but I find that many people are confused about how to increase your credit scores, what affects your credit score, and what actions you should not take.

 

So here are some basic tips to use to help you with your credit score.

 

  • If you have a credit account that you no longer want to use, DO NOT CANCEL the account. Simply cut up the card and forget that you have it.  When you CANCEL an account, it acts as a big negative against your credit.  Strange, but true.  Just don’t use that card any longer and leave the account open, very simple!

 

  • Keep your balances to less than 50% of your total credit in each account. So for instance, if you have a $5,000 limit on a credit card, always do your best to keep the balance on that card under $2,500.  Having more than 50% of the allowable balance works against your credit score and can lower it substantially. 

 

  • If you have applied for a large purchase, such as a mortgage on a house, DO NOT BUY ANYTHING ELSE ON CREDIT! For instance, if you are waiting for approval on a mortgage, don’t go out and buy a car!  I literally had a client that did this once, and it totally made it so that he could no longer buy the house he wanted!  Just wait until after you close on your house, and then make those other purchases. 

 

  • Several inquiries on your credit in a short amount of time will lower your credit score. Now, don’t panic, because in order to get credit, your credit HAS to get checked.  One or two credit inquiries will not lower your score.  But it is when you have several that your score will suffer.  This is not a big hit, maybe a few points, but it is something to consider if you have marginal credit required for a purchase, such as a mortgage.

 

  • The best way to improve your credit score is to open three new accounts, use them for purchases you would normally make, like for the gas in your car, and then pay them off totally each month. If you did this for six months, your credit score would be greatly increased.  Now this does not eliminate any derogatory accounts, but it will raise your credit score.

 

  • Always do your best to make your payments on time. When you don’t, not only will your credit score suffer, but you will most likely see interest rates soar to the highest heights of interest possible!  That alone can make your payments out of reach.  So be sure to make your payments on time. 

 

  • If you get into trouble on an account, (or more than one) call the company that you have the debt with. It always helps to let them know you are in trouble and to see if there is any way that they can arrange to help you catch up, or to make your payments.  You may be surprised that they are willing to work something out with you.  More communication is ALWAYS better than less!

 

Being wise about your credit scores can turn out to be a very valuable asset for you in life.

 

 I wish you all the best in 2016 – hopefully this will be a very prosperous year for you!

Freddie Mac Issues Warning to Homebuyers About Credit Score Scams

WASHINGTON – Nov. 10, 2015 – Freddie Mac issued a warning for homebuyers about scams that entice them by promising to raise their credit score in exchange for money.

“Who doesn’t want the highest credit score possible to garner the most-favored terms?” Freddie Mac notes on its website. “For many Americans with consumer credit negatively impacted by the housing crisis and fluctuating economy, it’s easy to be lured by the promise of a raised credit score,” Freddie Mac says. “Schemes that falsely raise credit scores will land borrowers in scalding hot water – as well as cost you time and money combating both origination- and servicing-related fraud.”

Freddie Mac highlighted three types of common fraud schemes to raise credit scores:

1. Disputing credit with credit bureaus
A new program with FICO – called FICO Score Open Access for Credit & Financial Counseling – was created to help borrowers who have credit management problems by providing FICO Scores along with credit education material to help consumers understand credit scoring and learn more about financial management. However, some fraudsters are using the program in a scam.

“(Scammers) may direct a borrower to contact credit repositories repeatedly to dispute previously defaulted debt,” Freddie Mac warns. “The fraudster hopes the creditor will miss responding to one of the disputes and the defaulted debt will disappear temporarily, triggering a jump in the borrower’s credit score. The borrower may qualify for – and close on – a new mortgage before the credit report correctly reflects the defaulted debt and the borrower’s true credit score.”

2. Claiming identity theft falsely
Some companies encourage buyers to falsely claim identity theft on their loan application in order to have debt removed from their credit report.

“Some borrowers who falsely claimed identify theft have gone as far as providing affidavits of identity theft and police reports,” Freddie Mac writes. “Of course, lenders take these claims seriously and investigate. In some instances, they discover that the ‘police report’ is fake, never actually filed, or from a police department that doesn’t exist.”

3. Misusing credit protection numbers
Using a credit privacy number – an alternative for a Social Security number most commonly used by celebrities and politicians to hide previous credit issues – can be a dangerous move.

“Some consumers with poor credit acquire a CPN with the intent of creating a new, clean – and misleading – credit profile,” Freddie Mac notes. “CPNs were not created for this purpose, and mortgage loans originated using a CPN are ineligible for sale to Freddie Mac. Borrowers who use a CPN with the hope of leaving their bad credit histories in the rear view mirror are in for a rude awakening.”

As the Federal Trade Commission bluntly points out, “By using a stolen number as your own, the con artists have involved you in identity theft,’ for which you may face legal trouble.”

Source: “Freddie Mac Issues Credit-Scam Warning to Potential Home Owners,” HousingWire (Nov. 6, 2015)

© Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688

ZOMBIES AND BOOMERANGS????? What the heck do they have to do with Real Estate?

Well, these are just two of the ‘new’ real estate terms that have come about with our changing real estate market.

Zombie homes are the ones that have been abandoned by their owners, and are not being taken care of by anyone. Eventually the bank will take over basic lawn care and ensuring the house is locked, but these houses can remain empty and ignored for years before the banks show up. That is an invitation for break-ins, homeless people moving in, drug dealers and many other scenarios. I watched a Zombie house that was literally ignored for nearly SIX years. One day I noticed there was a motorcycle with a cover in the driveway, and it stayed there for some time. Sure enough some guy had moved onto the porch and was blatantly parking his motorcycle in the driveway. I guess he thought no one would notice! Another neighbor had alerted the police, and one day I actually saw him and snapped a couple of quick pictures and sent them on to the Police. That was the end of his ‘free rent’. Anyway, I digress…! ;-} The bottom line is that Zombie homes can pop up anywhere, it doesn’t matter how much they are worth.

Boomerangs is the new term for unfortunate home owners that lost their homes in this past real estate recession, and have now had enough time to re-built credit so they start in the direction of purchasing their own home again. It was a rough ride for a lot of people, so it is really nice to know that the nightmare can end and decent people can actually live the dream of home ownership again.

Just a quick tip — If your credit was ruined (or if you have never built up credit), here is a way to quickly build/re-build good credit:
1) Obtain three credit cards. It doesn’t matter if they are secured with your bank, or for a retail store that will give you a card. Just get three sources of credit set up. It does not matter how low the credit limit is.
2) Charge something each month on the new cards that you would normally be paying for –- like gas for your car for instance. Then — and this is the IMPORTANT part –- pay off each card in full every month.
3) If you do this with three sources of credit for only six months, you will be amazed at the difference in your credit scores.

Once you have good credit again, it may be time to consider buying a new home. Feel free to call me so that we can explore this option for you. In the meantime, I hope you can avoid the Zombies! :)) Pam Ryan Anderson

Current market conditions

For 38 straight months, real estate prices in the Tampa Bay area have increased. The market remains very active with lots of listings and buyers. The time has come once again for buyers to jump when they see something they like, because it probably will not be around tomorrow. It is also still a great market for investors, and competition is tough!

Interest rates are staying in the mid to high 3% range, an amazing opportunity for anyone that can qualify to purchase a home. The short sales have tapered off, but there are still quite a few bank foreclosures to be had. Despite this, it is still a decent time for owners who want to sell their homes, with the way prices have steadily climbed over the last three years.

For more specific information, please feel free to send us a message or give us a call!

NEW HOPE FOR THOSE THAT HAVE LOST THEIR HOMES TO FORECLOSURE OR SHORT SALE

Since the housing crash began in 2007, about 7.2 million homes have been sold by short sale or have been foreclosed on, forcing these home owners to become renters. The Federal Housing Administration (FHA) is helping these new renters be able to purchase their own home again with their new Back to Work Program.

The new FHA Back to Work Program gives homeowners the opportunity to qualify for a low interest loan with as little as 3.5% down payment. There are some conditions to meet, but people that have found themselves in this position can now buy a home in only one year after their loss.

First of all, the buyers must show that at least 20% of their household income had been lost for at least six months, creating the reason for the short sale or foreclosure.

Secondly, the buyer must show that they have worked to re-build their credit over the last year.

The nickname for this new situation is Boomerang Buyers, those that bounce back and can once again buy a home, and Uncle Sam has developed this program to help people that lost their homes and have worked to re-build their credit. Call Ryan Realty today to see if you can qualify for this new program, and start the process to owning your own home again!

What’s really happening in the local real estate market?

The real estate market has changed markedly in recent months, with April showing home prices increasing 12.1% over April 2012, and then having a similar increase again in July. These are the largest gains in pricing since February 2006. Prices are on a nice upward trend, and the inventory is less than it was even just a few months ago. The upward trend is especially nice to hear for homeowners that have had negative equity for the past several years.

With the lower inventory in today’s fast paced market, buyers have to move fast when they find something they like, because there are now fewer homes on the market and the competition is fierce. I’ve had many people in recent months want to ‘think’ about whether to make an offer, but before they made their decision, the house they wanted was already under contract. I can honestly tell a client when they should jump and not wait, but it is till their choice, and in this market that could be a bad mistake. I’m not one to pressure my clients into making a decision, but these days, when I recommend ‘don’t wait’ unfortunately I’ve been right every time!

However, this is a great time to be buying a home, as prices are sure to continue increasing as the demand for housing remains and strengthens.

The interest rates are usually in the 4% range, and a little birdie told me that they should be staying in this range for a while. Of course, I wish I had a crystal ball to confirm that, but I still think this is a very good guess! This is another good reason to buy now, before the rates get any higher.

If you have thought about re-financing and have not done so, now would also be a good time to look into doing so.

And what about selling? That can be a complicated answer, depending on your current value, mortgage, etc. If you are considering selling your home, please feel free to give me a call. Once we chat, and I do a market analysis for your home, I will be able to give you the best options for your situation.

I will continue to keep current market information available, and hope this has been helpful!

Things that may turn off Buyers when you are selling your home

As a Real Estate Broker for nearly 24 years, I’ve seen a lot of reasons that a seller has problems selling their home. Here are a few things that are fairly easy to fix.

The first thing a buyer sees when they are looking at a home is the front door and entrance area. I’ve literally had buyers notice the dirt, damaged front door, spider webs, etc. and comment about the fact the these sellers obviously do not care for their home – just from their first impression at the front door. Once the buyer has that viewpoint, there isn’t much that can change their mind. Most buyers are not interested in taking on a ‘fixer-upper’ project and that is exactly what they think when they see indicators like this, right at the front door. Most buyers want a move-in ready home, and I encourage sellers to make their home as close to that as possible.

So if you have your home on the market, make sure the approach to your home, including the front door, is clean, neat, and inviting. Giving your front door a new coat of paint or varnish may do a lot more than you think to give a buyer a good first impression. Keep the area in front of your door swept and maybe put a nice plant by the front door.

Probably the worst thing I have noticed that turns off buyers is a house that smells like smoke or animals. If you smoke in your house, a really good cleaning of curtains, furniture, carpets, etc. will help get rid of that pesky, lingering smell. Also use an ozonator — that really helps clean up the air.

As one animal lover to another, I’m not going to tell you to get rid of your pets just because you are selling your house. But do make sure there are not odors from your pets that could turn off a buyer from considering your house. Keep the kitty litter clean, and as far away from living spaces as possible. Cleaning rugs and furniture will also help rid your home of pet smells. Also, when someone comes to look at your home, it’s a good idea to keep the animals away from the people looking at your home. The less distraction from looking at the home, the better.

The best way to check to see if your home has any odors is to go outside for a little while, then walk in and immediately check to see what your home smells like. There are some really good odor eliminators on the market these days that don’t add a perfume smell, which is another thing that could act as a negative.

Clutter is the third thing I will mention, as this definitely makes a home look smaller. To present your home as well as it can show, you should put away as much as you can. You may even have to remove a piece of furniture or two, just so that rooms don’t look small. The more you have in a room, the less space it will appear to have. Cleaning up clutter doesn’t cost anything either, but may be one of the best tools for selling your home. Keep it neat, orderly and un-cluttered and then the buyers that look at your home can see the space better.

I hope these tips have been useful and wish you the best in selling your home! If you would like a free market analysis to determine the current value of your home, feel free to give me a call. I’m here to help you market and sell your home!