Monday, June 30, 2008

FHA Officials Seek to Ban Seller-Assisted Payments

FHA Officials Seek to Ban Seller-Assisted Payments
By MICHAEL CORKERY and MICHAEL R. CRITTENDENJune 10, 2008; Page A13

Federal housing officials are trying again to ban seller-assisted down payments on federally insured mortgages, amid concerns about mounting losses tied to these loans.
Read the complete story... http://online.wsj.com/article/SB121306712046559817.html?mod=RealEstateMain_1

Richard says....

It is going to be much harder for you to buy a home whether new or resale when this loop hole for hard-working people like you is closed.


Here is what this means to you as a Buyer

  1. You will need lots more cash to buy a home. The required 3% FHA down payment. That’s $6000.00 of YOUR CASH for a $200,000 home, $9000.00 for a $300,000 home.
    (FHA loan limits are around $350,000 now, not just for the low end of the market.). Have you got $10,000 cash saved to buy a home now? How long will it take for you to save it?
  2. It must be your money and you will have to prove it. No gifts from family, friends, builders or charities will be allowed. More background checks of your bank account activities looking for large unexplained deposits. If you are purchasing an Investment property, you will have to come up with more cash for the buying end.
  3. Missed opportunity to have Home Seller pay the 3% down payment for you.
    Your housing costs will increase faster if you are renting. Landlords will take advantage of that and quickly raise rents.
  4. Renters don't receive tax saving benefits, equity build-up, and price appreciation of home ownership, your landlord gets them and your rent too.
  5. It is harder to save for the down payment with no tax breaks and ever increasing rents.

What to do about it.

Assess your personal situation.

  1. If the home seller paid your down payment and closing costs and you could keep your money in your account, could you buy a home now?
  2. Could you afford the monthly payments necessary? Remember that you may be elilgible for some big tax breaks with deductability of mortgage interest and property taxes (consult your tax/ financial advisor for details).
  3. Do you have steady employment and income that can safely cover your house payment?
  4. Would you like to have fixedmonthly payments for up to 30 yrs into the future, or will you be willing to pay your landlord more rent every year for the next 30 yrs? What would the rent be then?
  5. Do you want to set down roots and own a home to start with? Maybe renting is right for you now.
  6. Most homeowners are way ahead of renters in wealth accumulation in addition to home equity.
  7. If you needed money for your children's education, retirement or emergency needs, home equity has been a very useful source of funds.

Just a few things to consider....

A new free report by Real Estate Industry experts has been prepared entitled "How to Stop Paying Rent and Own Your Own Home". It has already helped dozens of local renters get out from under their landlord's finger, and move into a wonderful home they can truly call their own. You can make this move too by discovering the important steps detailed in this FREE Special Report.

Got a Real Estate question??? Ask a Real Estate Expert.

Feel free to call me or leave a response to any of my articles by posting your comments.

Thank you and have a Great Day,

Richard

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