Another USDA Funds Update!

Early last month we were told by a few USDA officials that the funds may not last through the end of April. With the new bill being introduced to Congress (https://oregonfhaloans.wordpress.com/2010/04/14/usda-update-and-its-a-good-one/) we may not have any funding lapses anyway.  With that said, here is an update on the 2010 Fiscal Year Funds:

The total amount allocated was $13,533,633,697. As of April 19th, 2010, we have used $11,797,934,866 of those funds, which leaves $1,645,879,942 available for purchases. 

This *should* get us through the end of the month and the $8000 tax credit rush.

There are many changes to the USDA program being discussed. As always I will forward that info as soon as I receive it.

 

Funding information as of April 19^th, 2010

USDA Funds Utilization Data

Total FY2010 Allocation = $13,533,633,697

Total YTD FY 2010 Obligations (Funded Loans) = $11,797,934,886

Total available Funds for purchase transactions: $1,645,879,942

Please contact me with any questions or concerns. I can be reached at 503.931.4490.

ML137

USDA Update…and it’s a GOOD one!

Capito Introduces Bill to Continue Access to Home Ownership in Rural Communities

Legislation Would Increase USDA Rural Housing Loan Guarantee Program’s Capital Reserve

Washington-Rep. Shelley Moore Capito, R-W.Va., the Ranking Republican Member of the House Financial Services Subcommittee on Housing and Community Opportunity, yesterday introduced legislation in the House Financial Services Committee to shore up funds for the U.S. Department of Agriculture 502 Rural Housing loan guarantee program.  Capito’s bill, H.R. 5003, The Rural Housing Improvement Act, would ensure that responsible families in rural communities continue to have access to the credit market to finance their homes. 

“I have received hundreds of letters, emails and calls from my constituents, including home buyers and sellers, who are concerned that the 502 loan guarantee program will soon run out of funds,” said Capito.  “My legislation would continue to assist thousands of responsible, low to moderate income West Virginians who otherwise wouldn’t have access to home ownership.”

This supplemental bill will resolve the funding crisis and will help us get through the year without any funding interruptions.  All concerned USDA GRH originators and other interested parties (real estate agents, builders, settlement agents, appraisers, community leaders, etc.) are encouraged to contact their members of Congress and Senate regarding their support for this bill.

Unites States Congress members:

http://www.house.gov/house/MemberWWW_by_State.shtml

United States Senate members:

http://www.senate.gov/general/contact_information/senators_cfm.cfm

As always feel free to call with any questions!

Travis Newton

503.931.4490

ML137

Your Credit Score!

Score: What is it Good For?
The Elements of a Credit Score

A credit score is an extremely important financial tool. It provides access to the financing you need in order to buy a car, a home, or pay for college tuition, among other things. Since higher scores equate to lower costs and vice versa, it’s vital to understand the factors involved in calculating your score. Here are the five elements that make up a credit score, in order of importance:

Payment History: 35% impact. Paying debt on time has a positive impact. Late payments, judgments, and charge-offs have a negative impact. Delinquencies that have occurred in the last two years carry more weight than older items.

When applying for a mortgage, every point in your credit score can make a big difference. So don’t make any major financial or credit decisions – even paying off an old debt or delinquency – without first discussing it with your mortgage professional.

Outstanding Credit Balances: 30% impact. This factor marks the ratio between the outstanding balance and available credit. Ideally, consumers should make an effort to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when planning to enter into a loan transaction within 3-6 months.

Credit History: 15% impact. This marks the length of time since a particular credit line was established. A seasoned borrower is stronger in this area.

Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive than a concentration of debt from credit cards alone.

Inquiries: 10% impact. This quantifies the number of inquiries (or requests for credit) that have been made on a consumer’s credit history within a 6-12 month period. Each individual inquiry – up to 10 – can hurt your credit score by as much as 5 to 30 points. Any additional inquiries thereafter will not affect your credit score.

In other words, don’t start the loan process until you’re ready to act. Otherwise each individual credit inquiry could cost you. However, scoring models have now been adjusted to count multiple “hard” inquiries within a 45-day period as a single request. So, when you’re ready, your credit will be too.

If you or anyone you know has any questions about credit scores or what can be done to repair them, please don’t hesitate to call.

Top 7 Reasons to Buy Your First Home Today

 

1. Free Money. April 30, 2010 is the last day to enter into a home purchase contract and still potentially qualify for a federal income tax credit of up to $8,000 for first-time homebuyers and up to $6,500 for repeat homebuyers. The credit can be claimed only on contracts that close by June 30, 2010.

2. Affordability. Based on recent property declines and current interest rates, home affordability has not been higher since it was first tracked over 40 years ago. Your grandparents couldn’t have received a better interest rate than you can today.

3. Tax Breaks. The IRS allows you to deduct the interest you pay on your mortgage, your property taxes and, in many cases for those who qualify, some of the costs to buy your home and mortgage insurance. Owning a home is a great way to lower your tax bill.

4. Build Wealth. Unlike paying rent, with each mortgage payment you make, you build equity and you decrease your income tax liability. Owning a home is still the best long-term investment.

5. Appreciation. As home prices have fallen precipitously in today’s tough economy, the basis for realizing appreciation in future years is very strong. Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2005, home prices increased on average 6.5%, according to the National Association of Realtors®.

6. Stability. Knowing you can establish roots and raise a family in one location, free of the desires or needs of your landlord to sell the property you are living in. This is something no other investment provides. You can’t live in a stock, and you can’t raise your kids in a bond.

7. Independence. Enjoy the freedom to do what you want to your home. After all, it’s yours to do what you wish. And, with any improvements you make, you have the ability to benefit from your investment. Try that with an apartment!

As always, feel free to call me with any questions you may have!

ML137

Rates remain strong!

Rates Lower After Strong Auction Demand…. · Although this week’s economic data was generally stronger than expected, it was overshadowed by solid demand for the Treasury auctions and intensified concerns about the economic situation in Greece, which helped mortgage markets. After reaching the highest levels since August, mortgage rates ended a little lower than where they ended last week.

Recent increases in yields on long-term fixed-rate securities such as 10-yr Treasuries and mortgage-backed securities (MBS) appeared to have been sufficient to attract investors. Very strong demand from both foreign and domestic investors for Wednesday’s 10-yr auction pushed Treasury yields lower, and mortgage rates followed. Increasing the appeal, renewed worries about the fiscal situation in Greece caused investors to seek the safety of US securities. Comforting statements from Fed officials that they expect inflation to remain low for a long time also added to the demand.

 In the housing sector, February Pending Home Sales jumped 8% from January, far exceeding the consensus forecast. Pending Home Sales are a leading indicator of housing market activity. The chief economist of the National Association of Realtors (NAR) considered the data to be a potential sign of a “second surge of home sales this spring”. To receive the homebuyer tax credit, contracts must be signed by the end of April, which likely boosted the results for February. As buyers seek to take advantage of the program, March and April pending sales may show strength as well.

As always, please call with any questions

Travis Newton

ML137

USDA Funds still available…for now.

USDA FUNDING

Funding Information as of: April 6, 2010	USDA Guaranteed Rural Housing Funds Utilization Data
Total FY10 Allocation   YTD FY10 Obligations   Total Available Funds*      Available Purchase Funds:       Available Refinance Funds:	$13,533,663,697   $10,888,061,403 $2,645,602,294 $2,548,636,600 $96,965,694

 

*Note:  In addition to these general funds that are now available, additional funding may also be made available for counties designated as disaster areas in 2008, or in disaster areas declared for Hurricanes Katrina and Rita. 

 

As a reminder, these funds are available in all 50 states.  USDA Rural Development continues to provide all states with funds as they are requested.

I hope this information will help you provide your clients with the current status of available funding for the USDA GRH Program, so you can collectively set the appropriate expectations regarding loan closings in the USDA Program. I will continue to keep you updated regarding funding for USDA Loans.

As always, I’m here to help! Please call me with any questions you may have.

Travis Newton

503.931.4490

Buying a home…you can afford

This evening I had a late appointment in the office. As most clients do, mine were worried about qualifying for their new home. As always I asked my borrowers “what have you budgeted for your payment and what do YOU feel comfortable paying each month?” I’m astonished that most borrowers have not discussed this with their spouse…until I’ve asked the question. Tonight I met with some wonderful home buyers who knew what their budget was before they sat down..boy, it was refreshing!

There are many factors to think of when buying a home. Many home buyers tend to overlook financial factors and can become financially over their heads before they even know what is happening. When you start looking for a home you should take every fee into account, both in terms of loaning and payments after you have bought your home. Here, we will go through some things that shouldn’t be over looked.

The first things you need to think of are:

How much your down payments will will be? Most loan companies usually want between 3.5 and 20 percent. Although in Salem Oregon and surrounding area’s we can also do the VA and USDA loan which require Zero Down Payment.

How much loan will you need to get and how long will you need to get it for, fifteen years or thirty years?

How are you going to pay the closing costs?This is one of the things many people tend to overlook at first. This could come straight out of your pocket, or as part of your down payment, or will it be tapped onto the rest your loan. Is the seller going to pay them?

How much will your loan cost you at the end of it all, with all the interests and fees included?

Once you have figured out what amount of monies you will need, you will have to think about these factors:

Are you going to be able to afford the repayment costs each month along with other costs like living expenses?

For example:

Your utilities

Your car payment

Your insurance

Food and health care

debts and other such things

How are you going to pay off your loan, along with everything else, if you fall into financial hardship?

All these things will come into account when you have a mortgage loan and you might not even think of them at first. Just because the company gives you the loan doesn’t mean that you really can afford it. It is one of the things you will have to be careful of and really think about before taking the loan so you don’t get in over your head.

Will you be able to afford any repairs and anything else that is needed on your new home before you are able to move in?

After you have found your home, will you be able to afford things such as:

Renovations you would like to carry out

Decorating and remodeling expenses

New furniture and household goods

Maintenance

General upkeep of the place

Your insurances

How about a security alarm?

Another thing you should consider is your plans for the future. Do you plan to get married soon? Start a family? These are things that you should consider when weighing your financial strengths. Greater expenses can add a burden to you mortgage payments.

With the right planning and the right loan, you can buy and enjoy the benefits of owning your own home and know that it is truly one that you can afford for years to come.

I’d welcome the opportunity to sit down with you, sort out your budget and find that perfect loan for your perfect home!

Don’t take it personally!

 

What to do when you are turned down for a loan

 Often, when your lender scrutinizes your loan application for a new home or piece of property so finely that it is finally turned down, it can be very distressing. If this happens, you should be able to understand just why such a decision was taken and do what you can to remedy the situation. The cause for rejection given below will help you understand just why it happens on some transactions.

Some causes for rejection:

The appraised value is far too low: Your lender perhaps found the ratio of the loan amount to the sale price or the appraised value of the property to be substantially lower than the purchase price or loan-to-value (LTV) ratio. Or perhaps the LTV is higher than your lender is allowed to approve. Then, perhaps you have applied for 90-95% of the purchase price as the loan amount. A low appraisal will then make your loan request far too large.

Insufficient funds: When your lender goes through your financial information and you’re verification of deposit, he/she will find that you do not have enough funds to make the necessary down payment and cover closing costs. Even if these funds do not come from a loan, a gift could go a long way. Alternatively, you could ask the seller to pay the closing costs.

Do you have insufficient income? Not only do you make enough to support this mortgage, but other debt as well. Are you paid as a self employed borrower? Do you “write off” expenses on your taxes? have you moved around from job to job? Recently changed job descriptions? Many things can contribute to insufficient income.

Up to your eyes in debt: Often, lenders don’t reject applications solely because of the amount of debt they carry. It is also the many credit cards they possess and revolving credit accounts with proof of rising account balances that come close to the limit prescribed. Such information is detrimental if you are out to prove your creditworthiness. To remedy the situation, you will need to pay off as many of your debts as possible and then reapply for a loan.

Poor credit history: What can be more devastating than to have your loan request turned down due to a history of poor debt repayment habits? If your lender sees that you have a history of making late charges often, owing amounts to the bank or insolvency, an approval may be tough to achieve. Older Bankruptcy’s are not deal killers, it’s what you’ve done with your credit since that transgression. If you’ve had a BK..Do not be late. You must show you’ve learned from your previous mistakes.

Rejection is not the end of the world: Just because a lender rejects your loan application doesn’t mean you can never own property. You can take corrective steps to improve your chances of acceptance. But if you work steadfastly at it, you can work through your problems. I work with a credit repair team that can assist you in the right direction. I welcome the opportunity to help you, whether your credit history is perfect..or in need of assistance.

Travis Newton

Oregon FHA & USDA HUD Rural Expert

Sr. Mortgage Banker

Preferred Mortgage

503.931.4490

travis@pmforegon.com

www.travis-approves.com

 ML137

Interest Rates Rising?

 

What’s Up With Interest Rates?

 

You’ve heard a lot over the last several months about historically low interest rates. But lately, you’ve probably heard that interest rates may be heading up in the near future–due in part to the Fed ending its purchases of Mortgage Backed Securities and other factors. Rates have increased .375% over the last week!

All of this begs the question: How and why do rates move? The answer involves a number of factors and can seem complex. But it doesn’t have to be! To help you understand how interest rates move, take a look at an easy to understand video. You’ll learn what the Fed has done for the last year to keep rates low but that ended on April 1st! You’ll also learn the connection between interest rates and Mortgage Backed Securities. Take a look at the easy-to-understand video by typing the following URL into your Internet browser on your computer:

http://www.mortgagesuccesssource.com/video.php?site=rates_hughes

 As always, please call with any questions you may have, I’m here to help!

The Salem Oregon Real Estate Market

 

Salem, OR Real Estate Market

 This location  has 55,841 households . Houses have depreciated 1.1%  over the last 12 months. There are 4953 homes  for sale in this location, including 2533 foreclosures .

http://realestate.aol.com/Salem-OR-real-estate