Liz Schneider's Mortgage Blog

This month brings many changes in mortgage financing!!

Two unit properties owner occupied properties  will require 20% down- if the buyer doesn’t have that FHA is the way to go! Buyers can still buy an owner-occupied 2 unit property with 3.5% down.

Debt to income ratios have been tightened up also. Maximum total debt to income ratio is 50% on FHA regardless of automated underwriting findings.

Debt to income ratios on conventional financing without PMI are 45%. If you need Private mortgage insurance (have less than 20% down)- PMI companies are tightening the ratio to 41%! If you have less than 20% down- FHA is clearly the way to go!! Debt to ratios are higher & the mortgage insurance rate is lower & automatically issued by HUD- no getting approval from a Private Mortgage Insurance company!

If you’re purchasing an investment property, you need at least 20% down & if you own more than 4 properties, you’ll need at least 25% down, a solid credit score above 720 & lots of cash reserves!

The tax credit was extended & also opened up to “move up” buyers that have owned their current home for the last 5 years out of the last 8 years. Tax credit is $6500 max, max sale price is $800k & max income is $125k for single filers & $225k for married tax filers. A purchase contract must be signed by April 30, 2010 & the transaction must be closed by June 30, 2010. That should keep those of us in the real estate & mortage banking industry busy through the summer of 2010.

Rates are still very low (30 year FHA today is around 4.75%) which should also keep buyers out there looking!

All the signs are pointing to “buy now”- a person who doesn’t own a home & wants to would be foolish not to buy now- interest rates on mortgages are low, home prices are low, but will be rising again!  Mortgage money is “cheap” now & your investment will grow- buy for the “long haul investment” not for a “flip”!

Bottom line- BUY NOW!!!

Give yourself the gift of a new home this holiday season!!!

Us Banker Magazine, August, 2009 issue, named First Place Bank on of the Top 100 MidTier Banks. First Place Bank was the only Northeast Ohio headquartered bank to be includedUSBankerFlier

First Place Bank is one of the few lenders approved to do HomePath Loans for Fannie mae owned properties. You can search Fannie Mae owned properties by going to http://www.homepath.com/.  Owner occupied properties can be purchased with as little as 3% down payment- all of which can be a gift. For investors, if you own less than 4 properties you can purchase an investment property with 10% down or for investors with more than 4 properties you’ll need 25% down. For owner occupied buyers, there is a No appraisal & NO Private Mortgage insurance option- saving on your monthly payment.  We are able to do HomePath Loans in all 48 states.HomePathFlier_FPB

$8,000 Tax CreditIt’s Monday after a long weekend!! Lots of buyers shopping for the “perfect” home so they can take adavantage of the $8000 homebuyers tax credit!! From what I’ve heard, it’s now turning into a “sellers” market- good news for some sellers that were thinking about putting their homes on the market- do it NOW!!
Banks are still lending money- FHA loans are the best way to go – low downpayment, no hits on rate for credit scores below 720, downpayment can entirely be a “gift” & the seller can help with closing costs up to 6% of the sale price.
Check out www.firstplacebank.com/lizschneider for an application 24/7!