STRETCH YOUR CLIENT'S BUYING POWER
SELECT will pay up to $3,600 of closing costs (or 1% of the total loan amount)
...and still offer great rates Today's Rate: 6.000% + 0 Points 6.198% APR 30 Year Fixed Rate Only 2 1/4 % down Credit scores as low as 600 Loans also available with scores as low as 540 with 2 1/4 % down, slightly higher rates apply.

FHA , DEAL OR NO DEAL

REASONS FHA WILL BE HUGE IN 2008

Reason #4 Flexible Underwriting

Subprime is dead. Clients with lower scores are either getting rejected for Conventional loans or being charged astronomical rates.

FHA does not have a minimum credit score requirement.

Select underwrites their own FHA loans. All FHA loans are initially put through a computerized underwriting system. Select, as a direct endorsement underwriter, can overturn any computerized decline if we can document compensating factors. This gives Select the flexibility to approve many more borrowers.

REASONS FHA WILL BE HUGE IN 2008

2008 THE YEAR OF FHA

Reason #3 FHA ALLOWS NON-OCCUPANT CO-SIGNERS.

Your buyer can use a relatives income in conjunction with their own income in order to qualify.

The co-applicant does not have to occupy the property.

This becomes especially important as the availability of no income verification loans have been greatly reduced. In fact, Fed Chairmen Ben Bernanke has put forth a proposal to eliminate all no income verification loans. (This proposal is still in the discussion phase and has not yet been approved.)

You may be turning away potential clients if you refer them to mortgage companies that do not offer FHA or are not experts in it. Put my 22 years of FHA expertise to work for you.

FHA, BACK TO THE FUTURE

REASONS FHA WILL BE HUGE IN 2008

Reason #2 FHA LOAN LIMITS ARE EXPECTED TO INCREASE TO $417,000.

This increase has already passed the Senate 93 to 1. The Senate is also asking for the minimum down payment requirement to be reduced to 1.5%.

These changes will allow for more FHA financing in our area. Nationally, it is estimated that FHA mortgages make up just 4% of the financing for single family homes. However, just 10 years ago FHA made up over 19% of single family financing.

FHA's higher loan limits combined with lower down payments and flexible underwriting will enable more of your clients to purchase the home they desire.

I have been closing FHA Mortgages in New Jersey for over 22 years. Please call me so I can highlight some of the ways FHA can help your clients.

RING IN THE NEW YEAR WITH FHA

REASONS FHA WILL BE HUGE IN 2008

REASON #1 : T0 AVOID HIGHER RATES

Your clients can avoid the new Risk Based Pricing* now being charged for Conventional Loans .

* The following Risk Based Pricing is now being charged on Conventional loan with less than 30% down:

1. Credit Score below 620 add 2 points or about 7/8% higher to the rate

2. Credit Score 620-639 add 1.75 points or about 3/4% to the rate

3. Credit Score of 640-659 add 1.25 points or about 1/2 % to the rate

4. Credit Score of 660-670 add .75 to points or about 1/4% to the rate

FHA still does not increase interest rates for clients with lower credit scores.

Select Mortgage Corporation is a direct underwriter for FHA. Call me with your scenarios. I can pre-flight them before you take your clients out to see homes.

WHEN RATES FREEZE OVER

Finally, there is some good news for the troubled mortgage market. The Wall Street Journal reported that the White House and the mortgage industry are close to a deal that would temporarily freeze interest rates for some sub-prime home loans on primary residences. Right now they are talking about a rate freeze for up to 7 years. The negotiations are on going.


Deutsche Bank reported on Friday that Henry Paulson's plan would cover homeowners who are facing their first adjustable rate increase and have some equity in the property. This group would include 1.2 million loans valued at $258 billion or about one third of outstanding "first-lien" sub-prime loans. Hopefully, this will allow homeowners to weather the storm.


The next hurdle is to get the investors who bought into funds of bundled sub-prime loans to accept this rate freeze. In my opinion, these investors do not have many options. I have read estimates that each foreclosed home could cost these investors between $50,000 and $100,000. Therefore, it would better for the investors to accept a loss from a rate freeze than risk having these loans go into total default.

I will keep you informed of the latest developments.

WAITING ON A FRIEND

I thought I would share this real life scenario.

I have a friend that is planning to rent a home even though he is more than qualified to buy . However, he wants to "wait out the market"

So, I started to think about the cost of rent, the tax write offs he would be missing, and the lost opportunity for equity growth, and thought, why wait?

I entered his data into a rent versus buy calculator on Yahoo to see what the results would be.

Here are the facts I entered:

For Renting

Rent is going to be $1600 a month with an additional $300 for rental insurance and an estimated average annual rental increase of 5%.

For Buying

The purchase price of the home he is looking is $300,0000. He plans to put 20% down. His mortgage of $240,000 can be locked in at 6 1/4%. The taxes are $3600, homeowners insurance is $600 and annual maintenance cost are $2000.

I also had to input his tax rate of 25% , a 3.5% estimated inflation rate, and a estimated tax return on savings of 6% before taxes .

The Results Are.........

My friend would save $611,606 in today's dollars by buying instead of renting!

Here is the link to the calculator. Maybe it will help your buyers that are still waiting for the "right time" to buy.

http://finance.yahoo.com/calculator/real-estate/hom-06