Taking equity from your home in the form of a reverse mortgage seems like a wonderful way for seniors to obtain extra cash, especially since many have lost money in retirement funds.  But there is a cost to using that money and other things to consider.
The new federally backed Home Equity Conversion Mortgage Saver Loan has smaller borrowing limits, higher interest ratesthe loan is cheaper than older versions (0.01% of a home's value vs. 2%), borrowing limits are smaller and interest rates are higher.  In addition, annual insurance costs of 1.25% of the home's value, closing costs, and upfront fees could mean big bucks.
Payback on the loan is when it is sold or the owner moves.  The longer a senior plans the stay in their home, the more the expenses are spread out.
Alternatively, another more practical way for seniors to get cash might be to sell.  Many seniors are living in a home that is much larger inside and out than they need.  They may also have a home that has more steps than they utlimately need.  Ray Brown, co-author or Mortgages for Dummies says that "Downsizing into a smaller home is one way to free up equity in your big, old empty nest".
Need to downsize for whatever reason, give us a call.  We specialize in helping seniors....

Mortgage interest rates remain under 4% putting homebuyers in Southern Indiana in a great position to buy or move up.  
In many cases, with todays low interest rates buyers can pay less to own a home than to rent a comparable home.  Home buyers who are moving up can it most cases buy a bigger home that better fits their needs yet not raise their monthly house payment.
30 year fixed mortgages are running as low as 3.9%, while Rural Housing for first time homebuyers is as low as 3.5%.
Unheard of rates when home prices are still suppressed - there has never been a better time to buy!!!
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On the threshold of a housing recovery, the government and it's regulations may actually be responsible for  putting on the brakes.
 
As a part of the Dodd-Frank Act that was passed in 2010, lenders can be exempt from risk reduction retention required securities if borrowers meet the guidelines of QRM (Qualified Residential Mortgage).  Unfortunately, one of the guidelines is that borrowers have 20% downpayment.  Over 69% of all loans in 2010 had less than 20% down.  Having more down does not necessarily equate that buyers will be less likely to default, but it will mean that less buyers will be able to buy.

Please be vocal in talking to your Congressional Representatives in getting this changed so that we can continue to move forward and NOT backward with the housing recovery....

 

Both Indiana and Kentucky have state programs that will make mortgage payments on their primary home for unemployed individuals. 
The programs have very specific guidelines that must be met, but up to $18,000 or 18 months of mortgage payments can be made for people living in "hardest hit" counties like Crawford, Orange, and Scott.  In Clark, Floyd, Harrison, & Washington counties payments could be made for up to one year or $12,000.
Hoosiers must be unemployed and eligible for unemployment insurance and delinquent on their mortgage as a result, but have record of 6 months of timely payments prior to being unemployed.
There are adjusted median income and reserve requirements as well.  Applications can be made online at www.877gethope.org or by phone at (877) 438-4673.
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RECORD LOW INTEREST RATES
 

Local lenders are reporting record low interest rates. 
Rates for 30 year fixed FHA loans are as low as 4.75%
Rates for 30 year fixed Conventional loans are as low as 5%

With rates this low, home buyers can purchase more home for less or purchase the same value of home with a lower monthly mortgage payment. 

A lot of good buys have just gotten better! 
Contact us if you'd like to receive a list of our "GOOD BUYS".

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Everyone is aware that late payments affect your credit score, but exactly how much was unclear.  Recently, Fair Issac, which developed FICO scores, revealed some estimates of point score declines with respect to mortgage delinquency issues such as late payments, foreclosure, or bankruptcy.
 
Fair Issac created two hypothetical consumers, one who starts with an average score of 680 and the other with a very good score of 780.  FICO scores range from 300 to 850.  Here are average credit score point reductions:
 
30 days late:      40 – 110 points
90 days late:      70 – 135 points
Foreclosure
Short Sale
Deed –in-lieu:     85 – 160 points
Bankruptcy:        130 – 240 points
 
Five main factors that affect a credit score:  Payment history (35%), Amounts Owed (30%), Length of Credit History ( 15%), New Credit (10%), and Types of Credit Used (10%).
 
 
      

     Beth Wardlaw
     Broker, CRS, GRI, e-Pro
     WARDLAW Real Estate Team    
     Keller Williams Realty Southern Indiana
     Cell:   502.807.2384  
     Fax:   502.554.9585
 
     WardlawRealEstateTeam.com
     Got the "BUG" to Move?
 

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Changes in FHA financing were announced on January 20th
Since the number of borrowers using FHA financing has drastically increased in the last year changes are being made to help protect the agency and make sure funds are still available without getting assistance from the federal government.

     Upfront Premium increased
           The Mortgage Insurance Premium (MIP) will be increased from 1.75% to 2.5%

     Decrease in Seller Assistance
           Sellers can only pay a maximum of 3% towards buyer closing costs, down from 6%

     Increased downpayment for under 580 credit score
           Most lenders will not lend for borrowers with under 620 credit score, but FHA will lend to those with under 580 providing the           borrowers put a minimum of 10% down

     The 90 day "flipping" rule
            Homes will not have to be held for 90 days before they can be sold

FHA is an important component in the market.  Over 30% of all loans between September 2008 and September 2009 were FHA.  FHA works for first time homebuyers, buyers with not a lot of down payment, and buyers with less than perfect credit.

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