USRDA Loans & Underwriting

A little known issue that is popping up in regards to using this loan for housing in the local Ephrata area is throwing a wrench in some sales. So buyer beware when using this loan program that your costs for obtaining the loan might be higher then you think.flood zones ephrata

Because of the fact that Downtown Ephrata is within a flood zone obviously you have to obtain flood insurance which can cost you an extra $800 or more prior to closing.  Along with this however, is the requirement that USRDA requires housing within a flood zone to also have a survey of the flood zone and where the house is sitting to verify that the home is 12 inches above the flood path.  If the home is not above the 12 inches they will not loan on that particular piece of property.

This survey is going to cost you an additional $500-$1000 from a local engineering company.  Don’t be caught unaware in the middle of the transaction with additional costs that can keep you from buying your dream home.

Posted on March 8, 2012 at 8:42 pm
Heather Adkinson | Category: banking, Moses Lake, Real Estate

USDA Loan Program

We have all been hearing a lot about this Loan Program lately.  It seems every offer I get nowadays requests a USDA loan and I thought it would be great if we all had a little more information about these types of loans.j0401040

The USDA is a guaranteed loan program that can offer buyers 100% loans much like the 80/20 loans of the past.  This is a government backed loan program that has no private mortgage insurance requirement and has more flexible qualifying guidelines that allow more people to affordably purchase their homes.  There are also no maximum loan amounts on these loans like the FHA guidelines have.

One of the first requirements that these loans have is that the property must be purchased in a eligible property area.  Second is that you must meet certain income eligibility requirements, there are lower credit scores allowable on this program as well.  Be aware however that your closing costs can be more with this loan as they take the mortgage insurance premiums and charge them at the beginning of the loan instead of throughout the loan.  Lenders however will let you finance this fee if you need to.

If you would like more information on USDA loans and how they can help you get into a home feel free to call at 509-760-7733.

Posted on February 23, 2010 at 1:10 pm
Heather Adkinson | Category: banking, Moses Lake, Real Estate | Tagged ,

New FHA Requirements and How it Will Affect You

So today the Commissioner announced some changes that are in the pipeline for FHA mortgages.  Since I would say today in our area 3 out of every 5 mortgages are FHA this will impact a lot of us in this area.For new borrowers to qualify for a loan if they have a 580 credit score they must now put 3.5% down on the transaction.  For someone with a lower score they will have to come up with 10% down on the home.

The FHA has decided to raise up front mortgage insurance costs from the borrower from 1.75% to 2.25%.  They are also requesting permission to increase the maximum MIP that they can chargeDoes it suprise you that an insurance company wants to increase rates?  Doesn’t suprise me a bit!j0432728

 For new borrowers to qualify for a loan if they have a 580 credit score they must now put 3.5% down on the transaction.  For someone with a lower score they will have to come up 10% down on the home.

The bigger change is that sellers can now only contribute 3 % on an FHA sale which is down 3% from what we’ve normally used at 6%.  It seems they want buyers to have a bigger financial stake in their home by them having to actually put money into it upfront.

FHA loans have gone from a low of 3% of all totals loans to now a high of 40% of all loans.  Here in Grant County that is now probably a estimated of about 75% of all loans so this will impact a majority of our loans in some way.

The biggest impact we will see in our area from this is the loss of 3% of seller contributions.  Some people to qualify for a loan need the full 6% to actually qualify for the loan as they don’t have all the needed cash to close.  This will affect how many buyers are out there buying homes here in Moses Lake.

Posted on January 20, 2010 at 11:11 am
Heather Adkinson | Category: banking, Moses Lake | Tagged ,

Interested in Equity Protection

Insurance
Insurance

Equity Protection for your Peace of Mind

We have insurance for everything else these days so why not another one for your house!  Except this insurance is supposed to insulate you from the fluctuations in the Real Estate market.  With this they say you can protect 100% of your financial investment in your home.

Formed by a group of Fortune 500 executives they have launched Working Equity Inc  a new form of homeowner protection that has never been seen before.

Homeowners who purchase Equity Protection will receive a payment if their local housing market index declines when they sell their home. When a homeowner purchases Equity Protection, Working Equity uses independent data to determine the local housing index at the zip code level. After a fixed waiting period expires, if the homeowner sells their home and the local housing index has declined, Working Equity will pay the homeowner an Equity Protection payment equal to their home value multiplied by the percentage decline in their local housing index.”

While the actual value of the insurance is a little complicated to determine and it is based on a index created by a third party to the Equity Protection company it doesn’t sound like a half bad way to deal with the declining markets and ensuring that you don’t end up owing more on the property then it is worth in a down market.

Here are the 3 different scenarios they present on their website;

Scenario A: You sell your home for $225,000 – a $25,000 loss:
At the time of sale, the local market index is 90, a 10% decline. Since the local housing market index is down, you receive an Equity Protection Payment of $25,000. 


Scenario B: You sell your home for $265,00 – a $15,000 profit:
At the time of sale, the local market index is 95, a 5% decline. You still receive an Equity Protection payment of $12,500 since the local housing market index is down when you sell. 


Scenario C: You sell your home for $265,000 – a $15,000 profit:
At the time of sale, the local market index is 110, a 10% increase. Since the local housing market index is higher, the Equity Protection contract terminates with no payment.

There are 3 different types of plans available currently:  Lifetime Protection, Flexible Protection, Flexible Term.  The cost they advertise is 1-2% of the purchase price either paid month to month, in installments, or all at once.

It is definitely an intriguing idea but would love to hear from those that have had experience with this company or this type of insurance.

Posted on November 24, 2009 at 12:51 pm
Heather Adkinson | Category: banking, Homeowners Insurance, Moses Lake, Real Estate

Feeling Vindicated Today!

An opinion on market conditions and Real Estate within the Moses Lake community

Posted on November 18, 2009 at 8:07 pm
Heather Adkinson | Category: banking, Moses Lake, Real Estate

Feeling Vindicated Today!

An opinion on market conditions and Real Estate within the Moses Lake community

Posted on November 18, 2009 at 8:07 pm
Heather Adkinson | Category: banking, Moses Lake, Real Estate

Daily Show: Selling Timothy Geithner’s House

[vodpod id=Groupvideo.3878442&w=425&h=350&fv=autoPlay%3Dfalse]

How funny and accurate is this, makes you think about who is really managing this crisis.

If you are looking to Buy or Sell Real Estate in Grant County I would love to Help!  Call or text me at 509-760-7733

Follow Heather on Twitter @ hjadkinson

Become a fan on Facebook @ http://bit.ly/27KD73

Follow my Moses Lake Real Estate Blog @ http://hjadkinson.wordpress.com/

Posted on November 9, 2009 at 6:56 pm
Heather Adkinson | Category: banking, Real Estate | Tagged ,