Archive for April, 2010
This weeks puzzle.—
I wrote an offer on a Fanny Mae Forclosure for my client. It is indicated by the Checked Box in the California Association of Realtors Contract I used, that it is to be an FHA loan with 3.5% down as specified in the the contract (obvious to most) . The contract is specific. Earnest money deposit, offered price, loan amount, balance of the purchase price (not costs of obtaining loans and other costs) in the amount of __$__ to be deposited with the Escrow Holder within sufficient time to close escrow. and then offered price again.— So the seller— Fannie Mae— writes in the counter offer a higher price than my buyer offered which is typical if the seller does not like the offered price. — But then— probably not being too good at math or not knowing how real estate contracts actually are to be written, or may just have had a bad day at the typewriter.—Typed in and filled in the blanks in their own Pre-Printed form— and kept the buyers loan amount the same yet the price was higher.— So it was substantially more than the 3.5% down loan program the buyer is doing.—Duh— So besides the fact I feel for the listing agent (who’s a nice person, good Realtor and good communicator) that is working with a seller who appears they had a bad day when trying to counter this offer by typing in the buyers loan amount—which is just bizarre anyway (because it says, and I quote “the purchaser shall apply for a loan in the amount of $$$ (I am not telling). —-I think you get my point anyway—Their generic counter offers also have no place to indicate there will be another counter offer in case the buyer does not agree with the terms.—It seems pretty obvious they do not counter. —Fine—as my client said, let them keep it.— I have never in my real estate career seen any seller tell the buyer what their loan amount is to be.—Purchase price yes—but buyers loan amount??? —So, as Steven Tyler said in a song I like—”Get a Grip”. —
Buy Buy Now.
FHA MIP (Mortgage Insurance Premium) will be going up Monday April 5 to 2.25%, up from 1.75%. –up 1/2% (so as an example–for $100k loan– that means $500 will be added to the loan amount) and since private mortgage insurance is pretty much gone–at least there is still the available option, FHA. Just in case you didn’t know - the MIP is not funded by the government, it is funded by the homebuyers who (buy in) with their up-front mortgage insurance premium and their monthly payment of MIP as well. It does add to the cost of the monthly payment, but if you don’t have the 20% down payment for a conventional loan at least you have that as an option, if you want to buy a home using the 3.5% down FHA loan. It appears that FHA (Federal Housing Administration) is making these changes to make sure that the MIP still keeps lenders comfortable with them knowing the insurance for them is still there if the buyer ends up in default (so it lessens their loss as a lender). Without that security of the insurance for the lenders– probably all loans would be at least 20% down payment or more. So pretty much anyone who wants to buy a home that they will live in— I still say now is the time to buy your home. Interest rates are climbing. FHA has petitioned Congress to raise the minimum down payment from 3.5% to 5%. So that is probably coming, just not yet.— Happy Easter. — Buy Buy Now.