Incentive Programs Key to Housing Backlog

Many prospective home buyers are unaware of some pivotal programs designed to help make the purchase of a home more affordable. These include assistance with down payments, special financing and even tax breaks on your purchase.

One key demographic that is helped with such incentives are police officers, emergency workers, and especially teachers. These programs are especially important to helping encourage homeownership within one of the most underserved areas of the population.  Furthermore, they help alleviate the glut of vacant homes crippling many communities throughout the country. 

One of these programs is the Teacher Next Door Program allowing qualified teachers the opportunity to purchase a HUD-owned property at 50% of the asking price. Its goal is to have teachers buy homes and commit to living in them for at least 3 full years. Another similar program opens up the same possibilities for police officers.  Teachers, firefighters and emergency medical technicians can help revitalize their communities through HUD's Good Neighbor Next Door Sales Program.

Several real estate companies offer fee rebates for using their agencies. On a local level, counties officers offer applicable employees access to various incentives.  The Howard County Maryland Public School system has the Employee Incentive Program allowing mortgage and real estate incentives, which include closing cost credits and lower rates.

In a time when many Americans are suffering from poor economic conditions and unemployment levels still stubbornly high at over 8%, people often rush to place blame. The target of the blame (often justified) is political figures ranging from the President on the national level all the way down toward local City Council members. When people suffer it is a natural inclination to look at those who are believed responsible for their troubles. Since the start of the downturn in 2008 the root cause of the problems has included members of Wall Street, Banks, Mortgage brokers, the Federal Reserve Board, among many others.

When economic conditions have deteriorated to the level where public services need to be cut, taxes raised or a combination of both – public sentiment turns against the biggest expenditure of all, public sector employees. A common belief is that is immune to the cancelled pensions, layoffs, furloughs, and pay cuts that a large group of private sector employees face. As a result, sentiment turns against public sector employees and the unions that represent them. In actuality, many jurisdictions – many public employees, such as NYC public school teachers face the same fate as those in the private sector.

There is no doubting the system in place for the public sector needs some kind of overhaul. However, teachers, police officers, emergency workers and fire department personnel are all some of the most underappreciated groups in our current economy, and remain the back bone of most communities. Special housing programs allow an opportunity for this key demographic to live closer to where they work and become a more entrenched fixture in the communities they represent.

These programs are also vital to the redevelopment of many areas, directly resulting in more jobs, safer communities, and the chance for a better education for the children of local residents. With the sale of vacant or foreclosed homes property values become more stable, in turn increasing property tax revenues to the state budget. An unoccupied home cannot be taxed, and plummeting house values reduces the revenue collected by the state for currently occupied homes.  

These improvements to the neighborhood also decrease crime and recreate the sense of community which has been lost in so many areas.  

These benefits are not just about entitlement spending. They are about societal issues whose benefits are far outweighed by minimal expense associates with the administering of such programs. 

It may be tougher to qualify, but people still get mortgage loans

There may be road blocks experienced when attempting to qualify for a home loan however it’s often not as difficult as assumed. Rates remain at or near record lows and programs still remain available for those with no equity OR who owe more than their home is worth. Those that allow home owners to reduce rates (even without an appraisal in some cases…) and either reduce payment and the mortgage length.  With the uncertainty of the stock market, taking advantage of the opportunity to reduce one’s loan term is paramount for many to eventually retire. Some lenders have recently introduced reduced credit score standards allowing some to qualify through FHA and VA with credit score as low as 600!

Unfortunately, the media often overshadows the positives of the market. As a result housing inventory often remains stubbornly high, people struggle more with their financial situation, and still many believe they have no options. Some may not know where to turn to get answers, are told negative and often misinformed information from friends or colleagues. As a result, they don’t even attempt to improve their situation when help is usually available. Some common complaints heard today is I don’t have enough money for a down payment to buy or I don’t have the equity needed to refinance my loan to reduce my payments. Still rates remain near record lows over the last year, yet many still have rates much higher than they need to have.

While lenders may take a closer look at the income, asset, & employment detail as well the appraisal more closely than ever before there’s the potential of great benefits to homeowners. Home prices in a lot of markets are more competitively priced than they have been in years. Such value buys are a tremendous way to gain rental income or take advantage of any future upturn in real estate. Current homeowners, potentially affected by layoffs and declining home prices, are able to reduce their rates and often the terms of their current loans. In an economy where gas is nearing $4/gallon and consumer staples have risen rapidly, such cash savings is paramount for many just to keep ends meet.  Even when it is not possible for financing, there is a national website set up for free housing counseling (or in Maryland). While the news is often negative these days, take advantage of what is positively available today, before these options run out. For more information on how these programs may benefit you, contact us now!

The importance of a home inspection

Obtaining a home inspection is a vital step in buying any new home. Whether it’s a first time home buyer or a seasoned home buyer/owner; whether it’s a residential property, vacation, or rental there cannot be an underestimation to the importance of a home inspection.The home inspection provides the buyer with an unbiased opinion on what they can expect with the condition of their home. While sellers generally prefer to sell their homes “as-is” or as close to that as possible, it also helps the seller in understanding the condition of the home they are attempting to sell. Regardless, homeowners that agree to purchase a home without the inspection can have thousands of dollars worth of repairs on their hands they weren’t anticipating. A move to such a home can be a financial nightmare that can exhaust any applicable savings. Those who face this issue can quite possibly end up traveling down a slippery slope of accumulating additional debt. This has the possibility of becoming overwhelming financial and can even result in foreclosure.

Oftentimes buyers will assume that waiving a home inspection may help them prevail when multiple offers are placed on a given home. They believe they will loose leverage in a seller’s marketplace and may “fall in love with the house”. These buyers often are so focused on the house at hand and not as concerned about the tremendous financial liability which they will become committed. In some cases they may be able to adequately assess costs associated. However, most people don’t fall into this category. Even if a prospective home appears to be well kept up to date, the average home owner will miss vital issues that only those qualified will find.

A qualified home inspector will be able to inspect areas of the home and foresee issues pertinent to the buyer proceeding with the purchase contract. Very key issues pertaining to major expense items such as the roof, windows, plumbing, electrical, heating/air conditioning, among others items allow the buyer the opportunity to opt out of the contract if the seller doesn’t repair these items or agree to reduce the purchase price. Depending on various state laws, the seller may be financially responsible to repair such items. However, smaller items will fall onto the hands of the buyer of the home but can often depend on market conditions and the overall deal. Generally everything is negotiable. However, not all home transactions are routine and buyers and sellers. Both sides make their decisions differently, whether they are financially or emotionally based. Regardless, not requesting a home inspection is never worth the risk. Homes rarely will provide any such incentive such as a discount for the condition. Informed home buyers are much more aware of their options and are willing to move onto the next home of interest. In addition, they provide an unbiased opinion the realtor cannot provide. Doing otherwise takes on tremendous risk financially, emotionally, and can wreak havoc on the lives of all those involved.

Protecting your largest investment

Millions of Americans home owners are at risk due to being underinsured or not insured for life insurance. When a home is purchased, it often takes two people working full time positions to be able to afford the mortgage in today’s economic climate. People often worry what would happen if they lost their job(s) or became disabled, however, very few realize the risk that death presents for their families. As a result they inadvertently leave the financial well being of their family in jeopardy because often the mortgage becomes unaffordable in the event a spouse dies. When the loss of a loved one occurs, the family home is often lost to foreclosure, the kids or uprooted from schools, or life savings are drained in an effort to hold on financially.

“I’m young; I don’t need to worry about life insurance yet!” “I can’t afford life insurance!” “But I have a pre existing condition, what kind of insurance could I possibly be eligible for?”. These are just a couple of the many excuses people provide for the rationale about life insurance and the reasons they don’t have enough, or none at all. Many, especially at a younger age, aren’t able to consider the possibility of dying. However, once the commitment of a home and family has started the need for life insurance rises exponentially. The responsibility to the family, and to take care of them, and to allow for a quality upbringing as well as the expenses of clothing, food, and medical care make it seem fiscally difficult to add yet one more expense (such as life insurance). However, when the mortgage becomes unaffordable, the bank will take the home thus destroying the stability and structure of the family along with creating serious problems. Still others assume it’s unaffordable or have medical conditions that make them uninsurable. They rely on the small employer sponsored plan that is often cut back or eliminated in cost cutting measures. People don’t often consider the very real possibility of being laid off and losing income on top of any life insurance provided by the employer. Even without these issues, many don’t consider life insurance rates have dropped and often can qualify for much more coverage, with a longer guaranteed term.

The truth is life insurance is affordable, necessary, and a small price to pay for the piece of mind it brings. For many, coverage will be less than the price spent in a week ordering take out.  While it may take small sacrifices from your budget, one has to ask themselves “what is more important than the financial wellbeing of my family?” Those will pre-existing medical conditions are also able to get insurance through some providers. For those who may be uninsurable, there are often plans available without medical underwriting. While it may cost more than someone with a stronger medical history, it is still a necessary step to take. But like everything else, the price increases the longer you wait. Email today to see just how easy and affordable proper coverage is!

Protecting your largest investment

Millions of Americans home owners are at risk due to being underinsured or not insured for life insurance. When a home is purchased, it often takes two people working full time positions to be able to afford the mortgage in today’s economic climate. People often worry what would happy if they lost their job or became disabled, however, very few realize the risk that death presents for their families. As a result they inadvertently leave the financial well being of their family in jeopardy when the mortgage becomes unaffordable due to the death of a spouse. When the loss of a loved one occurs, the family home is often lost to foreclosure, the kids or uprooted from schools, or life savings are drained in an effort just to hold on financially.

“I’m young; I don’t need to worry about life insurance yet!” “I can’t afford life insurance!” “But I have a pre existing condition, what kind of insurance could I possibly be eligible for?” These are just a few of the many excuses people provide for the rationale about life insurance and the reasons they don’t have enough, or even none at all. Many, especially at a younger age aren’t able to possibly consider the possibility of dying. Often family longevity comes in and is viewed as yet another reason why should needs can be put off for later in life. However, once the commitment of a home and family has started the level of need for life insurance rises exponentially. The responsibility to the family to take care of them and allow for a quality upbringing as well as the expenses of clothing, food, and medical care is a daunting enough task. However, when the mortgage becomes unaffordable, the bank will take the home thus destroying the stability and structure of the family which creates serious problems. Still others assume it’s unaffordable or have medical conditions that make them uninsurable. They rely on the small employer sponsored plan that is often cut back or eliminated in cost cutting measures. Never will the thought of actually loosing their job, and the life insurance due to a layoff. Even without those issues, many don’t consider that life insurance rates have dropped and often can qualify for much more coverage, with a longer guaranteed term.

The truth is life insurance is affordable, necessary, and a small price to pay for the piece of mind it brings. For many, coverage will be less than the price spent in a week ordering take out.  While it may take small sacrifices from your budget, one has to ask themselves “what is more important than the financial wellbeing of my family?” Those will pre-existing medical conditions are also able to get insurance through some providers. For those who may be uninsurable, there are often plans available without medical underwriting. While it may cost more than someone with a stronger medical history, it is still a necessary step to take. But like everything else, the price increases the longer you wait. Email today to see just how easy and affordable proper coverage is!

National Mortgage Licensing System Protects Consumers

Based on the state of the industry these last few years, it was completely necessary to remodel the licensing system. Prior to the recent changes, tracking the quality of lenders/brokers and originators was challenging. Those individuals/companies committing suspect or illegal business practices were tough to track leaving individuals vulnerable to deceptive loan officers.

While the system continues to evolve, it has experience a few setbacks along the way to improvement. While still a great success, understaffed states are lacking the preparations to change over. Poorly trained individuals end up with unanswered questions as to how to adhere to the law while some states even have conflicting or duplicate standards. Some of these issues are still being worked out. However, since the playing field has been leveled (so to speak) by having originators at big banks becoming NMLS registered it reassuring that any loan officer you work with should be registered regardless of minor kinks in the system.  These changes are probably the most important piece of pro-consumer legislation introduced to the residential lending industry. The barriers of entry into this field were too low previously and almost anyone could originate mortgage loans with little or no training or education. In the first half of the 2000’s, thousands were entering the industry yearly as a part time job with little ramifications for the quality or ethical standards of their work. 

Recently, The National Mortgage Licensing System, or NMLS, has begun requiring the licensing, certification and registration of loan officers in all 50 states. Individuals and companies looking to apply for, amend, renew, and/or surrender licenses managed by NMLS for the state(s) licensed by the loan officer or mortgage lender/broker are required to use this system. The NMLS initiative was begun by state mortgage regulators in 2004 in response to the increased volume and variety of residential mortgage originators, and the need to address these changes with modern tools and authorities. The proliferation of the mortgage business had added to the urgency of a standardized licensing system which required a system of criminal background checks, education, and testing of loan originators and the lenders/brokers where they are employed. The overall goal is to tract, monitor, and remove unscrupulous originators when necessary.

Today loan officers are held accountable and have to abide by these new regulations. Consumers can check the license status of the originator as well as the lender/broker at one simple website. On this website, consumers are able to easily find pertinent information about the loan officer, company affiliations, as well as any applicable investigative measures.