David Nuss' Blog

FHA Streamline Refinancing
Fees Reduced

A new program could save qualified borrowers $3,000 a year, even those who owe more than their home is worth.

The White House recently announced significant changes that will reduce the fees charged for the Federal Housing Administration's (FHA) Streamline Refinance Program.

Beginning June 11, 2012, the Streamline Refinance upfront fee of 1%* will be reduced to 0.01% of the total loan amount. And the annual fee will be lowered from 1.15% to 0.55% of the total loan amount.

By refinancing through this streamlined process, the average qualified FHA-insured borrower will save approximately $3,000 a year or $250 per month, on top of any savings from refinancing to a lower mortgage rate.

The "streamline" refers to the minimal amount of documentation and underwriting that needs to be performed. Streamline refinancing can be done without an appraisal or income verification, providing the person(s) on the loan hasn't changed.

There are no loan-to-value (LTV) restrictions on streamline refinancing. This is significant for underwater borrowers whose loan amount may exceed the current value of their home. However, second liens must subordinate with a maximum combined LTV ratio of 115% based on the original appraised value of the property.

The basic requirements of a streamline refinance are:

• The loan must already be FHA insured and endorsed on or before May 31, 2009.
• Borrowers must be current on their mortgage payments with no late payment in the previous 12 months.
• The refinance must result in a lowering of the borrower's monthly principal and interest payments.

Here's a program designed to help teachers, police, firefighters and other emergency workers buy a home for 1/2 price. There are some stipulations, like living in the home a minimum of three years before selling it.

It's a HUD program and is intended to move professionals with stable jobs into neighborhoods to revitalize the neighborhoods and put families into foreclosed homes - a win-win-win.

Read more

Dave Nuss, Broker/Realtor
Licensed in the State of Oregon
Murray Brown Real Estate
www.Homes-SalemOR.com
877-713-2612
D.Nuss@comcast.net

It’s a Buyers’ Market for Real Estate Investors, too

    Turn on any financial news program and at some point you’ll hear the experts extolling the virtues of diversification. Real estate, even through the market downturn, has long been considered a conservative, long-term strategy to growing wealth.

In fact, that very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across American and historically low mortgage rates, two essential factors that usually don’t trend in the same direction, have triggered a buyer’s market in many areas of the country. For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat.

While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.

· Learn all you can. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment’s notice. It could take days or months to sell a property, depending on the strength of the market in a particular region.

· Consider cash flow. You’ll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants.

· Start small. Look into buying a condominium, single-family home or a duplex. Leave large apartment buildings and commercial properties to the pros.

· Inquire at the local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.

· Find a property that will be in demand. Look for a moderately priced home with three or four bedrooms, two bathrooms, and a garage that sits on a quiet street.

· Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask a local real estate professional about the area, its history, and how fast (or slow) properties are moving.

· Inspect the home you’re considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can’t always predict problems, try to set aside some of the rental income for unexpected repairs.

· Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?

· Be ready to make fixes quickly and respond to the renter’s needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.

· See your tax advisor for related planning and laws that can affect your investment decisions.

Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.

Dave Nuss, Broker/Realtor

Oregon Foreclosures

According to RealtyTrac, a California-based firm that tracks foreclosures, Oregon tied the national average rate for foreclosures in November with a rate of 1 in 579. Nationally, 1 in every 579 housing units received a foreclosure filing last month.  Marion County had a rate of 1 in every 419 housing units. Polk County had a rate of 1 in every 464 housing units. The county with the highest rate was Washington County with a rate of 1 in every 323 housing units.

Housing Units

Source: U.S. Bureau of the Census, State and County Housing Unit Estimates. Updated every year for states and counties. Updated every 10 years for places. http://www.census.gov/popest/housing/.

Definition:

A housing unit is a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or if vacant, is intended for occupancy) as separate living quarters. Separate living quarters are those in which the occupants live and eat separately from any other persons in the building and which have direct access from the outside of the building or through a common hall.

Dave Nuss, Broker/Realtor
Sundance Realty
www.Homes-SalemOR.com
503-931-3378