Spring Housing Market Update for Baltimore Metropolitan Area

Written by Stuart Epstein

It’s hard to believe that we are into May already!  I will say that I am happy to report that the first four months of 2012 have been one of the busiest that we have seen in a long time in the Baltimore area home buying market.  We are up by 9% over 2011 for purchase mortgages, and an average purchase price of $200,000, compared to $187,000 for the same period last year.  Many people are starting to realize that home prices may have hit their low point and interest rates could not be more attractive than right now.  For example, the average rate on an FHA 30-year fixed rate loan right now is 3.5% and a Conventional 30-year fixed at 3.875%.  Our refinances have more than doubled for the first four months of 2012 over 2011!  This is mainly due to rates being at an all time low.  Many are reducing the term from 30 years down to 15.

The majority of the new applications are 1st time homebuyers, who happen to be in the best position right now, given they have no house to sell as a contingency for buying.  They also have the benefit of receiving 1st time homebuyer grants and incentives, such as the CDA loan with DSELP (Maryland Mortgage Program) and the FHLB grant. 

We are also seeing more “step-up” buyers, those who are selling their current home and upgrading to a larger or superior home.  Since inventories of sought after homes on the market seem to be shrinking, some sellers are finding it easier to get contracts on their houses in a couple months.   Some areas are actually experiencing bidding wars again.

The mortgage qualifying and documentation standards have continued to get more and more restrictive, which can make for a stressful process when applying and taking out a loan these days. The good news is that qualified borrowers can still get a loan, and at historically low rates.  It just may be a bit more painful getting to settlement. 

I may sound like a broken record, but the key is having a good, reputable, local lender working for you to make the transaction as smooth as possible. 

If you own a home and have not refinanced in the last year, make sure you check with your lender to see if it makes sense for you to refinance.  There are several programs available to help: the FHA Streamline Refinance, the VA IRRRL Refinance and the Fannie Mae DU Refi Plus programs all have flexible guidelines to help those who may not have the equity normally required to get a lower rate.  If you are not sure if it makes sense for you to refinance, or if you are not sure if you can, don’t hesitate to call (410.491.0200) or email us to do a free analysis.

Enjoy the beautiful spring weather!

New FHA Changes Effective April 9th, 2012 – Is it a Game Changer?

Have you heard that there are changes coming on FHA mortgages, but unsure how they will affect you or your clients?  Here is a simple breakdown of the changes:

Up-front Premium – 30 year mortgage

• Existing Up-Front MI premium (financed into the loan)  - 1% of loan amount
• New Up-Front MI Premium effective April 9th  - 1.75% of loan amount

Monthly MI – 30 year mortgage

• Existing Monthly MI rate      - 1.15% assessed annually
• New Monthly MI rate effective April 9th    - 1.25% assessed annually

What does this mean?  Let’s use an example to demonstrate the new FHA change:
On a $200,000 home purchase, under the existing structure, the payment (excluding property tax and insurance) on a 30 year fixed rate loan with an interest rate of 3.75% would be $1088/month.  Under the new plan effective April 9th, the payment will go to $1110/month. 
So on a $200,000 purchase; it will cost you $22 more a month for an FHA mortgage AFTER April 9th. 
The good news is the required down payment will still be the same.  In this example, that would be $7000 required down.  Don’t forget that if you are a 1st time homebuyer, you may qualify for help with down payment, like the FHLB or the Maryland Mortgage Program, just to name a couple.
There are different FHA mortgage insurance rates when the down payment is greater than 5%, and also for 15 year mortgages.  If you would like a breakdown of these rates and how they may affect financing, don’t hesitate to ask the Stuart Epstein team to provide you with the numbers.
Also, if you have 5% to put down, you may want to ask us to help you compare the costs and benefits of Conventional financing as an alternative to FHA.  Depending on credit and other factors, you may save a ton on money by knowing ALL of your options!
Lastly, stay tuned for exciting refinancing benefits coming in June for those with existing FHA mortgages…
Happy House Hunting!

Please contact the Stuart Epstein team if you have any questions! Call us 410.491.0200 or email me directly at sepstein@carrolltonbank.com.

The FHLB Grant is Back!

Carrollton Mortgage Services is proud to be one of very few lenders in the State to offer this 1st Time Buyer Grant; Buyers may be eligible for $5000 towards their closing costs and down payment on a home!  FHLB is a forgivable grant (20% each year up to 5 years total) and is issued at settlement toward the down payment. The $5000 grant is per household, and is allowed to go towards a buyer’s FHA 3.5% minimum requirement for down payment.

Borrowers must meet just a few requirements to qualify for the wonderful grant and it is on a first-come, first-serve basis.

Carrollton helped over 135 1st time buyers just last year alone achieve the dream of homeownership with the FHLB Grant.  We also have several other down payment and closing cost assistance programs to offer that can be used in conjunction with FHLB or independently as well.

If you or anyone you know might be able to benefit from these funds, please don’t hesitate to call on us to help! Email at sepstein@carrolltonbank.com or call 410.491.0200.

Refinance to a lower interest rate with no appraisal needed and no closing costs!

Do you have an FHA loan?  Did you know that you can refinance to a lower interest rate with no appraisal needed and no closing costs?

Yes, it is true – Here are the highlights of the FHA Streamline Refinance Program:

• No appraisal required
• No income or asset documentation required
• We will pay all the closing costs – no out of pocket cost to you and nothing added to your loan amount
• Result of the refinance must be at least 5% reduction in monthly payment to be eligible

One of the reasons that this program is so popular is that is much easier to process, so you don’t have to go through the same headaches as a normal loan, and you don’t have to worry if the value of your home has decreased to be able to take advantage.  We can process your streamline in less than 30 days!

If you have an FHA loan and have not looked into the FHA Streamline Refinance Program, call me right away before rates increase again and you miss out.  In ten minutes, I can tell you if you qualify and send you a detailed estimate, showing what your monthly savings will be. 410.491.0200.