My Home Appraisal Came in Low

Appraisal Came in Low

Your appraisal came in lower than your accepted offer price. The first thing your agent should do is review the appraiser’s report for errors.  Appraisal challenges are not easy but what if your challenge fails?  There are essentially four options.

  • Ask for a new appraisal. You can ask the lender to order an appraisal from a different company. This could certainly be met with resistance and the lender could flat out just say no.
  • While not the best option for the seller, the price could be reduced to the appraised value and the sale could move forward.
  • The buyer could increase the amount of money they put down. If the seller is digging in their heals and won’t budge the buyer could increase their down payment to make up the difference in the appraised value.
  • The fourth option is actually a combination of the last two options. This is an option that I have personally seen work on a few occasions. Like anything else in life the buyer and seller compromise with the seller reducing the price and the buyer coming up with an additional amount of funds. In this scenario both parties contribute and the sale goes on as planned!”

Remember appraisal’s are not the ultimate judgment of a home’s value. A home’s true value is what a “qualified” buyer will pay for it.

Could refinancing save you money?

Refinance Your Home

If you’re a homeowner, you might think that all the recent talk of low mortgage rates doesn’t affect you. But that isn’t true — they may be your key to savings.

Even if you had a sizable down payment or received a competitive interest rate at the time, refinancing your home now could mean saving thousands over the life of your loan. Ask yourself these four questions before making up your mind:

  1. Have your finances improved? If you have a better financial profile now than when you bought your home, you may be able to make a larger monthly payment with a lower interest rate, speeding up your mortgage repayment. If your credit score has improved or you have a higher income, this applies to you.

  2. How much have interest rates dropped? Mortgage rates fluctuate with changes in the economy. You may be able to obtain a more cost-effective mortgage today than when you first purchased the property, even if rates have only dropped by a percentage point.

  3. How much will refinancing cost? The process will likely cost you a percentage of the amount you borrow. Remember the application and appraisal fees when you bought your home? They apply here too. Another thing to consider: If your home interest payment is a tax deduction, a decrease in your interest amount could lower that deduction.

  4. How much longer will you be in the home? If you’re not planning to stay in your current home very long, and therefore won’t need to pay off the mortgage, refinancing shouldn’t be your top priority. Spending the time and money on that process won’t pay off like it would if you stay in your home for another 10 years or more.

Are you ready to refinance? Do you have specific questions about your situation? Reach out today. Norm Hansen | nhansen@rpm-mtg.com | Cell: 775.720.2826

3 Year-End Steps For Every Renter

Along with year-end parties, comes New Year goal setting, right? It’s time to look forward and envision where you see yourself this time next year. Is owning a home on your list of goals?

Before you stumble upon that dream home while out looking at holiday lights, take these three simple year-end steps that will jump start your journey to homeownership. You’ll be well on your way to a new home before that New Year’s Eve countdown begins. 

1. Simple budget review

How much are you currently spending each month on rent and other housing related expenses, like utilities? What is that amount annually? Do you anticipate any rent increases?

Take a look at your other expenses too. You want to have a solid understanding of your monthly income and expenses so you know what you can handle for a mortgage payment. This exercise will keep you from jumping into a mortgage payment that stretches you and your family too far.

And, with homeownership comes home maintenance so it’s important to have a cushion for those necessary (and sometimes fun!) projects.

2. Interview lenders

Mortgages are never one size fits all. You want to work with a lender who can listen to your goals and budget to find the best fit for you. Make a plan to talk to at least three lenders before year end. Learn about their low down payment options, fees and the monthly and lifetime cost of your mortgage.

Check out our five essential lender interview questions for a guide on what to ask prospective mortgage lenders.

3. Search for down payment programs

Do you know about homebuyer programs that can help you save on your down payment and closing costs? Down payment programs can give you a major homeownership boost in the form of grants, forgivable loans and tax credits. But, they also require approvals and paperwork so you want to get your options on the table soon.

Investigate what’s available in the area you plan to buy. Use our program finder to answer a few question about your household to narrow down your options. Review your results with your agent and lender.

Good luck and happy holidays!

Story Provided by Down Payment® Resource

Fannie, Freddie New Mortgage Application Form

freddie mac logo

Fannie Mae and Freddie Mac released a redesigned mortgage application form in October. The Uniform Residential Loan Application is a standardized form used by borrowers when applying for a mortgage. This is the first time in 20 years there has been a change to the standard mortgage application form.

Presently, no specific date for the mandatory use of the new URLA has been set. But the GSEs will publish an interactive fillable PDF version of the new URLA in early 2020.
The new form explicitly references real estate sales contracts and requires the borrower to submit to the lender before closing any changes or new information including “providing any updated/supplemental real estate sales contract.” Additionally, the new form demands the borrower state that the terms and conditions of any real estate sales contract are true the best of their knowledge and that, “I have not entered into any other agreement, written or oral, in connection with this real estate transaction.” 

The new form also requires a more explicit statement as to the borrower’s intended occupancy. For single family property the borrower will indicate whether their intended occupancy is “Investment, Primary Residence, Second Home” or “Other.” 

Home At Last™ Mortgage Credit Certificate

Home at Last™

As part of the Home At Last™ programs, the Nevada Rural Housing Authority’s Mortgage Credit Certificate (MCC) program now ensures homeownership remains affordable. Qualified first-time buyers and veterans will now be provided with an annual federal income tax credit equal to 20% of the mortgage interest paid every year for the life of their loan. Don’t miss out because this amazing program is only available at time of home purchase! Visit here to learn more!

FHA Condo Buyers Get Relief Soon

HUD

In an effort to promote affordable and sustainable homeownership, especially among credit-worthy first-time buyers, the Federal Housing Administration (FHA) published a final rule which establishes a new condominium approval process. The polices become effective October 15, 2019. FHA’s new rule introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA-insured financing; extends the recertification requirement for approved condominium projects from two to three years; and allows more mixed-use projects to be eligible for FHA insurance. “Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. The vast majority (84 percent) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA’s programs. As a result of FHA’s new policy, it is estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually. Source: Forbes

FHA ISSUES NEW CONDOMINIUM APPROVAL RULE

HUD

In an effort to promote affordable and sustainable homeownership, especially among credit-worthy first-time buyers, the Federal Housing Administration (FHA) today published a long-awaited final regulation, and policy implementation guidance, which establish a new condominium approval process.

Designed to be flexible and responsive to market conditions, FHA’s new condo rule and the new Condominium Project Approval section of the Single Family Housing Policy Handbook, provide a comprehensive revision to FHA condominium project approval policy.  In particular, the new policy will allow certain individual condominium units to be eligible for FHA mortgage insurance even if the condominium project is not FHA approved. The polices become effective October 15, 2019. Read FHA’s new condominium approval regulation.

FHA’s new condominium policy is part of a broader Administration objective to reduce regulatory barriers that currently restrict affordable homeownership opportunities. FHA’s new rule:

  • Introduces a new single-unit approval process to make it easier for individual condominium units to be eligible for FHA-insured financing;
  • Extends the recertification requirement for approved condominium projects from two to three years;
  • Allows more mixed-use projects to be eligible for FHA insurance.

“Condominiums have increasingly become a source of affordable, sustainable homeownership for many families and it’s critical that FHA be there to help them,” said U.S. Housing and Urban Development Secretary Ben Carson. “Today, we take an important step to open more doors to homeownership for younger, first-time American buyers as well as seniors hoping to age-in-place.”

HUD Acting Deputy Secretary and FHA Commissioner Brian Montgomery added, “Today we are making certain FHA responds to what the market is telling us. This new rule allows FHA to meet its core mission to support eligible borrowers who are ready for homeownership and are most likely to enter the market with the purchase of a condominium.”

The vast majority (84 percent) of FHA-insured condo buyers have never owned a home before. While there are more than 150,000 condominium projects in the U.S., only 6.5 percent are approved to participate in FHA’s mortgage insurance programs.  As a result of FHA’s new policy, it is estimated that 20,000 to 60,000 condominium units could become eligible for FHA-insured financing annually.

Single Family Policy Handbook Guidance

FHA’s new Single Family Handbook sections published today provide the additional requirements that lenders and other industry participants need in order to implement FHA’s new policy, including requirements for single-unit approvals, minimum owner occupancy requirements, and commercial/non-residential space limits. Read FHA’s changes to its Single Family Handbook.

Single-Unit Approvals

As of October 15, FHA will insure mortgages for selected condominium units in projects that are not currently approved.  An individual unit may be eligible for Single-Unit Approval under the following conditions:

  • The individual condominium unit is located in a completed project that is not approved;
  • For condominium projects with 10 or more units, no more than 10 percent of individual condo units can be FHA-insured; and projects with fewer than 10 units may have no more than two FHA-insured units.

Minimum Owner-Occupancy Requirements

FHA will require that approved condominium projects have a minimum of 50 percent of the units occupied by owners for most projects.

FHA Insurance Concentration in Condominium Projects

FHA will only insure up to 50 percent of the total number of units in an approved condominium project.

Commercial/Nonresidential Space Limits

FHA will require that the commercial/non-residential space within an approved condominium project not exceed 35 percent of the project’s total floor area.

Mortgage Rate Update

Mortgage News Update

Mortgage rates moved higher after remaining at around the same level for about three weeks. The rise in rates was driven by continued improvement in consumer spending and partly due to optimism around a forthcoming cut in short term interest rates, which should provide support for business and investor sentiment.  The 30-year fixed-rate mortgage averaged 3.81 percent with an average 0.60 point fee for the week ending July 17, 2019, up from last week when it averaged 3.75 percent.  A year ago at this time, the 30-year fixed-rate mortgage averaged 4.52 percent.

No Interest No Payment Loan?

Nevada Rural

Home At Last™ turns homeownership dreams into a reality by offering Nevadans a little extra boost. And that little boost can make some BIG things happen for our homebuyers when they tap into the power of down payment assistance … up to $24,000! Our down payment assistance is provided in the form of a 3-year second mortgage that is completely forgiven after living in the home as a primary residence for the first three years. There is NO interest and there are NO payments on the down payment assistance provided. 

Thanks to the Home At Last down payment assistance program we have OUR HOME!  Our dreams are coming one step closer to all we had hoped for. We appreciate all the help in purchasing our home so our new chapter in life could begin. So very blessed to be honored by this program. Words cannot provide the gratitude we have for this opportunity!” – Jeannette in Reno

Let me introduce you to a Home at Last certified lender. What do you have to lose….not much! Robert Stiles, Chase International 877-617-2498 Serving Nevada’s own at Carson Valley.

Mortgage Rates Dive Deeper

Mortgage News Update

While signals from the financial markets are flashing caution signs, the real economy remains on solid ground.  The 30-year fixed-rate mortgage averaged 4.07 percent with an average 0.50 point fee for the week ending May 16, 2019, down from last week when it averaged 4.10 percent.  A year ago at this time, the 30-year fixed-rate mortgage averaged 4.61 percent.