Clearwater Florida Homes Condos Real Estate

We tend to jump through lots of hoops to please a customer.  This morning I got a "TEXT" message on my phone that read:

               "We have selected another Realtor to sell our house. Thank you for your presentation"

Flashback to 2 weeks ago.

I had a call from a prospective client wanting to interview Realtor(s) about selling their home.   He was pressed for time and had to meet me at 9am the next morning, before he left town.   I got my research done, and was prepared.  

During our meeting at his home, his phone rang twice.  Both calls were from other Realtors®.   That confirmed that I was not the only agent he was interviewing, and I was not the last on his long list.

           **  He was not happy with the market statistics.

           ** He was not happy with my suggested list price.

           ** He wanted me to understand that his home was the best                              home in the neighborhood.

At the end of our meeting he asked if I would like to change my suggested list price on my presentation?  I told him that I would not make promises that I could not keep, and couldn't deliver a buyer at his high price goal.

I won't mislead my clients about the market, or the comparable sales that were used in my presentation.  I explained the issues with our buyers market.   A well informed "SELLER" is more important to me that just getting a listing.  Buyers want the biggest bang for their buck. As a  professional service, I rely on the Three P Approach: Price, Presentation, Promotion.  We want the buyers to want his home, and not one of the other 10 homes for sale in the same neighborhood.

                                    The market is what it is....not what we wish it to be.   

   

 

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If you're looking for a home in the Gainesville area, you can visit my primary Gainesville FL Real Estate website at www.ehomesgainesville.com.  Thanks!

 

 

 

FHA first proposed the monthly mortgage insurance changes in the beginning of 2010. Bill H.R. 5981 was first passed by the House in the spring and was just passed by the Senate the other day.  What does this bill do for FHA mortgages? They have projected that it will yield approximately $300 million per month to the FHA insurance fund.

So what are the new FHA changes? - For terms greater than 15 years -

LTV's <= 95% will increase the monthly fee by 85 bps

LTV's >   95% will increase the monthly fee by 90 bps

And lastly, it will reduce the Upfront Mortgage Insurance Premium, UFMIP, from 225 basis points to 100 basis points.

The plan is to go into effect by September 7th, 2010 on all FHA case numbers. FHA gives it's reasons to this new plan. FHA letter from David H. Stevens

 

 

 

So what do the actual changes mean to the average borrower that will rely on FHA loans when purchasing a new home or refinancing?

                - The Old Plan -

LTV's <= 95% will increase the monthly fee by 50 bps

LTV's >   95% will increase the monthly fee by 55 bps

 

 

Example of the changes regarding the FHA monthly mortgage insurance known as MMI or annual mortgage insurance premium and the FHA upfront mortgage insurance premium known as UFMIP.

 

 

 

 

 

 

 

 

 

 

 

 

As you can see, it would be much cheaper monthly with the old plan, even though you pay $3,317 more upfront, on top of your loan. This can also be a tax write off since it's included in your principal. You break even point on this type of scenario is 47 months, which is roughly 3.9 years. After this break even point, you would have started to spend more money in reality. This is how FHA will increase it's mortgage fund. As you can see, it won't be increased as quickly upfront, but over a longer period of time. So if you held onto this mortgage for 7 years, you would have spent approximately $2,522.

Now, there are several other factors to consider when reviewing this kind of information.  Just for the fact that your original balance on the loan will be $3,317 lower and in 7 years, still be that much lower. And as I mentioned, you would have a little more of a tax advantage on the higher balance though.

All I wanted to do was to present the basics of FHA loans and not get into the extreme details on how one could show either side. What could this do to a potential home buyer?  It could reduce your purchasing power. In this scenario, if you had originally qualified for a $275,000 loan with qualifying ratios of 31/43, what would your new purchase price be.

 

 

- New Purchasing Power after September 6th, 2010 -

With the new FHA monthly mortgage insurance and the FHA upfront mortgage insurance premium changes, your purchasing value would drop approximately $10,000, a purchase price of $265,000. Now, these are just averages, because this will all be based on the actual purchase price. Meaning if values are higher or lower, the total amount could change some. But this should give you a good understanding of what changes lie ahead for FHA mortgages in the near future.

 

 

UPDATE : Travis Newton did a similar post, using a $200,000 purchase price and as you can see, the mortgage payment inceased by $45.29/month.   Notice *** FHA Changes

 

 

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For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

 

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc