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July 2008 -Fed Chairman Ben Bernanke announced in a speech on July 8th, "the Fed will adopt new rules that will restrict lenders from penalyzing risky borrower who pay loans off early, require lenders to make sure these borrowers set aside money to pay for taxes and insurance and bar lenders from making loans without proof of a borrowers income. It also would prohibit lenders from engaging in a pattern or practice of lending without considering a borrower's ability to repay a home loan from sources other than the home's value. This statement essentially says: No Pre-payment Penalties, Lenders must Escrow for Taxes and Insurance, No Stated Income Loans and Borrowers must have documented reserves. All are prudent measures and the industry has already implemented most of these without Fed action. This to me is an example of the market correcting the excesses of the past few years that we are all paying for today. We've additionally seen FHA become a dominant source of mortgage funding in many markets. For borrowers with less than 10% for a down payment or credit scores below 680, FHA will be the program of choice. June 2008 - The Real Estate market is still in the midst of change. After hearing about the Mortgage meltdown for the past year, FNMA, Freddie Mac and now FHA are proposing or have already implemented changes to increase rates for those with less than perfect credit. In July, FHA will increase it's Upfront Mortgage Insurance for anyone with a credit score below 680. While that seems like bad news, many of these changes were needed to properly adjust the pricing of the loans for the real risk that lenders have been taking. If you have decent credit and want to own your own home, NOW IS THE TIME TO BUY. The inventory of unsold homes is still a bit high and Builders are cutting prices to move their homes. Banks are making quite a few concessions in the sales of Foreclosed homes so you can usually get them to pay your closing costs. FHA still allows for Down Payment Assistance from programs such as Nehemiah, so if you are working with a Knowledgeable Realtor, they can negotiate the program for you. If you Need to Refinance, NOW IS THE TIME! FHA programs can help you reduce your overall costs if you are stuck in an Sub-Prime ARM loan. By refinancing now, One client was able to reduce their rate from 9.75% to 6.25%. This saved them over $6,000 a year in interest costs and $500 a month in payment. What a relief that was, even with a low credit score. If you are purchasing Your First Home or Upgrading/Down-sizing to a home more suited to your needs. I can provide mortgage solutions for you. I cover Georgia, Florida, Tennessee, Alabama, South Carolina, and North Carolina. Just a phone call away, I am interested in helping you feel comfortable that you are making a sound financial decision. Three out of Four Clients that purchased their homes with a loan through me in 2007 were First Time Home Buyers, my specialty. Concerned about your Credit Score? Before you decide to make an offer on a New Home, be certain you know your score and what programs you are eligible for. There are things you can do to boost your score in the short term that can have a significant effect on your final interest rate. Send an email to Wharton.Smith@Semonline.com for a Free Information Booklet on Understanding Credit Scoring. Looking for a home in the Atlanta Metro Market, please contact one of my Realtor partners listed on the Links page. All are very experienced and will ensure your satisfaction in finding the home of your dreams. Each has the ability to find Luxury Homes at significantly less than market value today! The Atlanta Georgia Market has a number of UnderValued homes listed with Sellers offering many concessions. Or, browse the calculators and tools, learn about loan programs, or apply online and much more. We offer custom solutions for every residential mortgage financing situation. Whatever your residential financing needs, we will tailor a loan that's right for you.
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Wharton Smith
