The Heart of Austin

FHA Raises Loan Limits for Austin Home Buyers

The Federal Housing Administration recently raised the loan limit to $288,750 for FHA insured home loans in the Austin metropolitan area. FHA loans are popular with first time home buyers and those that want a lower downpayment, lower closing costs and easier credit qualification. 

Home buyers can put down as little as 3.5% of the purchase price for a downpayment.  This money can come from the buyer's funds or a relative who wants to gift the money. The seller is also allowed to contribute up to 6% of the purchase price toward the buyer's customary closing costs and prepaid items like tax and insurance reserves. The buyer must be employed and intend to live in the property for at least one year as a primary residence. 

With the new loan limit of $288,750, buyers can purchase a property for just below $300,000. The mortgage is insured by the federal government so loan qualifying is easier and the rates are better because the lender is taking fewer risks.  When it is time to sell, these mortgages are fully assumable at the seller's fixed interest rate at his time of purchase. All the buyer has to do is qualify to assume the loan. With interest rates predicted to double and maybe even triple over the next few years, this is an additional benefit of buying a home with an FHA fixed rate loan.

To search for homes in the Austin area that currently qualify for FHA mortgages, visit our website at www.WestAustin.com  We can review these properties with you and refer you to a reputable lender that specializes in FHA financing so that you can get pre-approved for an FHA loan, the first step in the homebuying process.

 

Posted by Laura Duggan, West Austin Properties, Austin, Texas on February 26, 2009.

Austinites Can Avoid Foreclosure

There are a number of reasons that a property and its homeowner can fall into a distress situation with foreclosure looming on the horizon. The inability for a homeowner to make their payment once it has "adjusted" to a higher interest rate is certainly at the top or the list.

Subprime mortgage loans and less than ethical loan officers lured unsuspecting and sometimes marginally qualified buyers into the housing market with introductory mortgage rates considerably below the prevailing interest rates. Now, thousands of homeowners can't make their mortgage payments and many are facing imminent foreclosure.

These loans came in all varieties with adjustments in interest rates tied to a volatile index. A once "affordable" property climbed out of reach as the mortgage rate "reset". Complicated and complex, it is not unusual to find mortgage payments that have increased dramatically leaving these homeowners with little capacity to keep making them. Some homeowners have seen their mortgage payments more than double and in some cases triple the original amount. Once a mortgage payment is missed, the lender begins the process of foreclosing on the property. In Texas, foreclosure can happen very quickly unless a homeowner acts fast to stop the process.

One remedy for this situation is to refinance the subprime loan. However, many homeowners with these types of loans find that they cannot refinance them for typically two reasons. They are not qualified now under the lending guidelines for the mortgage amount of their current loan or their property value has decreased since they purchased the property, and they now owe more than their property is worth. In either case, they are "short" whether they try to refinance or sell the property.

The Distressed Property Institute is teaching real estate professionals across the country to counsel these homeowners to avoid foreclosure. Through negotiations with the homeowner's lender, these real estate professionals who have been designated as Certified Distressed Property Experts are helping lenders and homeowners avoid foreclosure, a costly proposition for both parties. Through a negotiated "short sale" the CDPE agent is able to find a buyer for the property and work with the bank to accept an offer. In a short sale, the lender accepts less than the distressed homeowner owes and many times does so without recourse. While a foreclosure becomes a permanent record for the homeowner and damages their credit for years to come, a short sale allows the homeowner to resolve the debt and get on with their lives. For homeowners that have a security clearance necessary for their employment, foreclosure can jeopardize their security clearance resulting in difficult finding or keeping a job.

As a designated Certified Distressed Property Expert, I am uniquely qualified and committed to helping Austin homeowners who find they can't make their payments because of mortgage payment increase, loss of job, divorce or any other hardship to avoid foreclosure. Please call me if you know someone who could benefit from my expertise. All consultations will be kept stricltly confidential.  I can be reached by email at Laura@WestAustin.com or by phone at 512-750-2425.

Posted by Laura Duggan, CDPE, West Austin Properties, Austin, Texas, on February 23, 2009.