Huntsville Real Estate Blog

Huntsville Veterans Home Buyer Benefits Improve

Huntsville Veterans now have expanded homeownership opportunities, thanks to the Veterans’ Benefits Improvement Act of 2008.

Three provisions in the legislation are critical to help Huntsville veterans during the current housing turmoil. The law will make it easier for veterans who have fallen victim to risky subprime loans to refinance their loans into a safer, more affordable loans backed by the U.S Department of Veterans Affairs. The legislation also extends the VA loan limit increases through 2011, which will help veterans living in high-cost areas. In addition, the VA can now offer adjustable-rate mortgages to veterans. That would make Huntsville homeownership more attainable for military families and personnel who often have to move more frequently than their civilian counterparts.

If you are a Veteran thinking about buying a Huntsville home, please get in touch and we can give you some information on how you can take advantage of the great home purchase opportunities that exist right now.

Learn more about Huntsville homeownership by visiting MoveToHuntsville.com.

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Fannie Mae and Freddie Mac both announced they will not impose the loan fee increase scheduled to go into effect next month. Fees were to have increased from .25% to .5%, making it even more difficult for Huntsville home buyers. The biggest obstacle many ­­­­­­­­­­­­­­­­Huntsville home buyers face is the necessary cash needed for a down payment and closing costs.

Both companies, now controlled by the federal government, had decided to increase fees to boost their finances during difficult times.

Freddie Mac, however, will raise fees next year for riskier loan products, including mortgages that allow interest-only payments for the first few years. Freddie also will require higher credit scores for “piggyback” loans that allow borrowers to make smaller down payments by taking out two mortgages.

Taken together, Freddie Mac said the changes would provide “some relief from the challenges in the current market environment,” but added that it is following lending practices “that are prudent and largely applicable in all market conditions.”

To learn more about buying a Huntsville home, visit MoveToHuntsville.com.

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By now we’ve all heard buzz about the supposed “credit crisis,” with tales of all Huntsville AL real estate buyers being required to put 20% to purchase a home and then still being unable to find a lender to give them a loan. It seems the press just can’t get enough of all the “misery” in the Huntsville AL real estate industry. But is this really what is happening?

We are right in the middle of what might be considered the biggest disservice ever perpetrated on potential home buyers. The fact is that mortgage money is as available today as it was a year ago and loans are being made - right now - with little or no money down. Who are these lenders, anyway? They’re right down the street, you just need to know where to look.

Federal Housing Administration (FHA) loans are making a huge impact on the mortgage industry; recent estimates show that about one out of five mortgages is an FHA loan. Although FHA loans never “went away,” their re-emergence is a result of the collapse of the sub-prime market. Technically, FHA doesn’t require a minimum credit score; in reality, however, lenders typically will not approve an FHA loan with a credit score below 500. That is still a far cry from the notion that an 800 score is the only thing lenders care about.

Perhaps the best part of an FHA loan is that it requires only a 3% down payment. You read that correctly - 3%! Moreover, that 3% can come in the form of a gift or grant. FHA borrowers only need to have $500 in a transaction. On top of all this, FHA mortgage rates are as good or better than their conventional counterparts.

Extremely competitive rates, low or no down payment, and easier qualifying. No wonder FHA is moving up the charts!

Please call me at 256-508-0211 or visit MoveToHuntsville.com if you would like more information about FHA loans, a referral to a reputable local lender, or help getting into your first Huntsville AL home. You may also begin searching Huntsville AL real estate here!

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The U.S. House of Representatives has passed “The Expanding American Homeownership Act,” which will increase homeownership opportunities for millions of Americans by modernizing the Federal Housing Administration (FHA) and returning it to its traditional role as an important financing option in today’s Huntsville real estate market.

The Expanding American Homeownership Act will:

1) Eliminate the current statutory three percent minimum down payment, reducing a significant barrier to homeownership. FHA’s existing down payment requirement does not meet the demands of today’s marketplace, where most first-time homebuyers put down two percent or less. The “new” FHA would offer a variety of down payment options.

2) Create a new, risk-based insurance premium structure for FHA that would match the premium amount with the credit profile of the borrower.  It would replace the current structure, in which there is standard premium amount for all borrowers, while still protecting the soundness of its Insurance Fund.  FHA would have the flexibility to charge a lower premium for low-risk borrowers, and to charge higher-risk borrowers a slightly higher premium.

3) Increase and simplify FHA’s loan limits. FHA’s loan limit in high-cost areas would rise from 87 to 100 percent of the GSE conforming loan limit and in lower-cost areas from 48 to 65 percent of the conforming loan limit.  This change is crucial in today’s housing market.  In many areas of the country, the existing FHA limits are lower than the cost of new construction, eliminating FHA financing as an option for buyers of new homes in those markets. FHA has simply been priced out of the market in other areas, such as California, where FHA insured only about 5,000 home mortgages in all of 2005, down 95 percent from 109,000 in 2000.
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