Moratorium on Foreclosures

Moffett and Allison, the new CEOS of Fannie Mae and Freddie Mac, have announced a moratorium on foreclosures of occupied homes until early 2009. It's hard to say how many people will be helped by that, but it's good to see an effort being made to help homeowners. Fannie Mae and Freddie Mac are also looking at other approaches to help save people's homes. There's to be a streamlined modification program coming out in mid-December that should expedite mortgage modifications for those whose mortgages have changed from a low rate to some exorbitantly high interest rate.

This is something I'll be watching, for if it helps homeowners, it helps the real estate market which will help our entire economy, and that's a good thing!!!

Are You Missing Something with the New Homeowner Tax Credit?

I hear people scoffing at the new first-time homebuyer tax credit, saying it's nothing more than a loan. It's called a credit because you obtain it as a credit when filing taxes. It does also have to be repaid so it seems more like a loan. However don't throw out the baby with the bathwater! Take a moment to look at the benefit. . .
When most first-time buyers leave the closing table, they have little left in savings. And as new homeowners, they are now confronted with a mortgage payment that exceeds what they were paying in rent. They have a home to furnish, with more rooms to fill with furniture than their apartment in most cases. They may also need to spend money on painting, carpeting and window coverings. Plus, there are other home ownership necessities such as a lawn mower, ladder, etc. that must be purchased, not to mention the possibility of repairs or improvements the home may need.
More often than not these purchases are made with a charge card, with interest rates ranging from 12% to 19%. These additional monthly expenses for home-related purchases are in addition to the large monthly mortgage payment they now have. So why wouldn’t a buyer be excited about obtaining the $7,500 tax credit, and having the benefit of repaying it over 15 years without interest?
What if a first-time buyer really liked a home they saw that needed some major repairs or renovation, a home that represented a great buying opportunity? But after much consideration, they decided against buying it. They just didn’t have the financial resources after the closing to accomplish the type of repairs required, such as a new furnace or new roof or new siding or new windows. Wouldn’t the opportunity to obtain $7,500 in an income tax refund possibly be the answer to this type of concern?

Financing Not So Easy!

I ran into a financing snag today! My client qualifies for an FHA loan with 3% down (gift money from a relative) but neither Uptown Village nor Meadowbrook qualify for FHA loans. And that's where the homes are the client likes best. Next we tried for a rural development loan - I've sold several homes in Milan with that financing which is great and zero down! But the income limit for a couple is $70,700 and my client is a little over that.

The 4th loan officer I spoke to today at least was encouraging --- my client will have to wait until mid-January at which time the loan limit for rural development loans is increasing and then my client will be able to buy with -0- down! Fortunately time is not of the essence and the wait until mid-January is not so bad.

There are some really amazing buys in Milan right now. Any first-time buyer or any buy-up buyer or any investor should be seriously looking at homes right now. Prices aren't going up for some time yet, but inventory levels are shrinking all over the county as the low-priced homes get bought up. If you're a buyer, this is the perfect time to buy! Call me at 734-439-8405 if you would like to talk about real estate. Barbara