Yes seniors may purchase a home and have no monthly mortgage payment.  This is possible with a reverse mortgage (also known as a Home Equity Conversation Mortgage (HECM))

Here is an example for a 69 year old buying a home.

 

Purchase Price = 200,000

Amount of FHA reverse mortgage  =  $132,600

Funds needed a closing = $68,000

Monthly Mortgage Payment =   $0.00

 

Assumes the seller will pay all closing costs on a fixed rate reverse mortgage.

For more information on a reverse mortgage call (804) 433-1510 or click here.

 

 

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HPI delta from peakHome values dropped for the sixth straight month in March 2011, according to the Federal Home Finance Agency’s Home Price Index. The Home Price Index is a government-sponsored home value tracker.

The HPI report is the latest in a string of “falling home values” stories — a trend that’s troubling home sellers across Midlothian and nationwide.

However, although the Home Price Index says home values are falling, that doesn’t necessarily mean that they are. Like most statistics in the housing sector, the Home Price Index is plagued by poor methodologies and a lack of timeliness.

In short, the Home Price Index is flawed. In three ways.

The first big flaw in the Home Price Index is that it only measures the values of homes with mortgages backed by Fannie Mae or Freddie Mac. Homes financed via FHA, or via other means are specifically excluded from the calculation. For today’s purchase market, that leaves more than 1 in 4 homes “uncounted” — a big percentage of the market.

Second, the Home Price Index determines home values by measuring price change from sale to subsequent sale. This eliminates new homes — a major market segment.

And, lastly, the Home Price Index reports on a 60-day delay; we’re only now seeing data from March. This two-month lag renders the HPI a trailing indicator for the housing market instead of a forward-looking one. If you’re a home buyer looking for market insight, the HPI can’t give it — it’s out-dated and out of season.

Despite its shortcomings, though, we can’t ignore the Home Price Index completely. It’s among the most thorough home valuation models available, and it’s used in public policy discussions. When the HPI says prices are down, Wall Street and Capitol Hill take notice, and that trickles down to everyday life on Main Street.

Since peaking in April 2007, the Home Price Index is off 19.1 percent.

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Today is Tax Freedom Day®.  According to the Tax Foundation the typical American will work from Jan 1st through April 12th just to pay taxes.  Virginia’s Tax Freedom Day happened to also fall on the same day this year.  If you are renting buy your first home and move your personal Tax Freedom Day to a date earlier in the year.  Home owners enjoy extra tax benefits.  Consult your tax adviser about mortgage interest, PMI & property tax deductions.

Find out if you can qualify for home ownership by applying now or call Paul Cantor at (804) 719-1515.

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by | Categories: main, Purchase, Taxes | No Comments

Home affordability is at record high levels as home prices are down and mortgage rates are low.  However according to a recent article experts are predicting continued apartment rental rates as vacancy rates are dropping.  Many are forecasting double digit annual rent increases.  This is a reason for rents to look at buying a home.

If you are interested in pre-qualifying for a home purchase: click here.

 

www.PaulCantor.info

 

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by | Categories: main, Purchase | No Comments

Watch this NBC video, advising prospective first time home buyers to get off the fence and buy a home.  The reasons include, home affordability, low but sure to rise  mortgage rates, seller concessions (buyer’s market) and the uncertain future of Fannie Mae & Freddie Mac:

PaulCantor.info

(804) 719-1515

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Yesterday HUD (FHA) released their monthly report for December 2010.  This report shows REO (Real Estate Owned / Foreclosed properties) up 9.5% from November.

Combined REO for for Fannie Mae Freddie Mac & FHA was at 293,171 units at the end of 3rd quarter for 2010.  Fannie Mae & Freddie Mac have not yet reported 4th Quarter numbers.

Take a look at this graph.

This means homes are on sale for discounted prices.  Thinking about buying a home?  Now is a good time to look, it is a buyer’s housing market.

To get pre-approved for a purchase Click here.

www.PaulCantor.info

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Considering an FHA loan to buy or refinance a home? If so you should move fast. HUD has announced new annual FHA mortgage insurance premium (MIP) rates starting April, 2011. This means that the initial payment on FHA mortgages will feel like the note rate has increased .25%. These new monthly premiums are double what they were last year.

New FHA Annual Mortgage Insurance Rates

The following is the table for the new rates

Transaction Type LTV Loan Term UFMIP Annual MIP(% ÷ 12)
PurchaseStreamline (All Types)

Rate-Term Refinances

<= 95% > 15 Years 1.00% 1.15%
> 95% > 15 Years 1.10%
<= 90% <= 15 Years 0.25%
>= 90% <= 15 Years 0.50%

This may mean it may be harder to qualify to purchase a home and some FHA Streamline refinances will not make sense.

Apply for an FHA mortgage

If you are thinking of buying your first home or refinancing your current FHA loan with a streamline refinance start by sending a email by clicking here an email by clicking here..

Paul Cantor
(804) 719-1515

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Last Friday mortgage prices increased a little, but not much; holiday trade generally doesn’t amount to much. This morning the bond and mortgage markets opened better with no data points today; this week however, is filled with data beginning tomorrow. The dollar is stronger again this morning, not what equity markets want to see, the stock index futures were lower as a result. The US rate markets are supported on concern the rescue for Ireland will fail to contain Europe’s sovereign-debt crisis, increasing demand for the safety of U.S. government debt. Next up are Portugal and Spain as Europe’s debt issues show little signs of being contained. The tensions between South and North Korea continue to be a concern but so far as these kinds of face offs go, it hasn’t been a major impact on the markets.

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Christmas shopping (yes, I said Christmas) was slightly stronger than last year. Consumer spending on Black Friday was up about 0.3%, with most retailers better but still remains an unfinished story. Not anyway scientific, I was out briefly on Sunday and wasn’t impressed with what I saw at the most prestigious malls in Indy, not as much traffic as one would have expected. Most analysts expect stronger Christmas sales than last year, but refrain from becoming too optimistic.

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More QE 2 Fed buying today; the Fed is scheduled today to buy $1.5B to $2.5B of Treasuries due from February 2021 to November 2027 and $6B to $8B in government debt maturing from May 2013 to November 2014. The central bank plans to focus about 86% of its purchases on notes due in 2.5 years to 10 years, leaving the 30- year bond as the security that most closely reflects market expectations for inflation. Since the Fed’s Nov. 3 announcement, the 30-year yield rose 0.28 percentage points, suggesting growing investor confidence in the central bank’s efforts to avoid deflation as the economy expands.

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Date Time (ET) Statistic For Market Expects Prior
11/30/10 09:00:00 AM Case-Shiller 20-city Index Sep 1.00% 1.70%
11/30/10 10:00:00 AM Consumer Confidence Nov 52 50.2
12/01/10 08:15:00 AM ADP Employment Report Nov 58K 43K
12/01/10 08:30:00 AM Productivity-Rev. Q3 2.40% 1.9
12/01/10 10:00:00 AM ISM Index Nov 56.5 56.9
12/01/10 10:00:00 AM Construction Spending Oct -0.50% 0.50%
12/01/10 02:00:00 PM Auto Sales Nov 3.71M 3.68M
12/01/10 02:00:00 PM Truck Sales Nov 5.35M 5.59M
12/01/10 02:00:00 PM Fed’s Beige Book Dec
12/02/10 08:30:00 AM Continuing Claims 11/20/10 4200K 4182K
12/02/10 08:30:00 AM Initial Claims 11/27/10 422K 407K
12/02/10 10:00:00 AM Pending Home Sales Oct 0.00% -1.80%
12/03/10 08:30:00 AM Nonfarm Payrolls Nov 130K 151K
12/03/10 08:30:00 AM Nonfarm Private Payrolls Nov 140K 159K
12/03/10 08:30:00 AM Unemployment Rate Nov 9.60% 9.60%
12/03/10 10:00:00 AM Factory Orders Oct -1.30% 2.10%

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Overall, the most important day of the week is Friday with the employment figures being released, but we may also see sizable movement in rates Wednesday. Friday’s employment data could cause a significant change in rates, but Wednesday’s ISM index is also one of the more important reports we see each month. If Friday’s data reveals stronger than expected results we may see rates spike higher after its release, possibly erasing any gains from the week. It will probably be the key to rates moving lower or higher for the week. I suspect it will be another fairly active week for the markets and mortgage pricing, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

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Credit scores are becoming more and more important to home buyers.  Mortgage rate pricing is based in part on credit scores.  A home loan refinance may not make sense because a score is 1 point below a 680 or 720.  Someone with a 619 FICO score will have trouble qualifying for a mortgage to buy that first home.  Fair Isaacs now has a cool new tool to estimate a FICO score without pulling a credit report.  Check out the Free FICO® Credit Score Estimator.

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Reprieve after six straight days of worsening fixed mortgage rates. Rates on 15 and 30 year fixed rate purchase and refinance loans ended yesterday, October 28th in a positive (lower rate) direction.

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www.PaulCantor.info

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