Feds Give Home Owners Two More Days to Apply for Emergency Help

The federal government has given troubled home owners 2 more days to apply for $1 billion in foreclosure-avoidance assistance through the Emergency Homeowners’ Loan Program. The program, aimed at unemployed and underemployed home owners, was supposed to stop taking applications on Friday.

However, the federal government has extended the application deadline for the program until Wednesday for home owners who call the Homeownership Preservation Foundation’s HOPE Hotline (888-995-HOPE).

“The average EHLP loan is expected to be approximately $35,000, a rather significant amount,” said Colleen Hernandez, HPF’s CEO. “The loan is forgiven if the home owner stays in the home for five years — there would be no additional debt burden, no requirement to repay the money.”

Home owners can apply for EHLP assistance through the Homeowners’ HOPE Hotline or website until 11:59 p.m. (Eastern) on Wednesday, July 27.

Sponsored by the U.S. Department of Housing and Urban Development (HUD), EHLP is a zero-interest, forgivable bridge loan program designed specifically to help unemployed and underemployed home owners facing significant threat of foreclosure avoid that outcome.

Qualifying home owners who meet certain income and mortgage delinquency parameters can apply for up to $50,000 of assistance.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

Credit Score Requirments Ease For Some

Tight lending guidelines have weighed on the U.S. housing market during its ongoing recovery. Most lending institutions during the past two years raised their credit score requirements to as high as 650, making it nearly impossible for many people to obtain a loan.

Wells Fargo made it a little easier for homebuyers this past year, when the lender lowered its credit score requirements on FHA mortgages.

“Under its new policy, Wells Fargo will accept borrowers with credit scores of 500 to 579 if those borrowers can make a down payment of at least 10%,” said Robert Lentini, a mortgage expert who blogs for the website thetruthaboutmortgage.com. “For borrowers with credit scores of 580 to 599, borrowers must put down 5%. Borrowers with credit scores of 600 or higher can make a 3.5% down payment.”

Quicken Loans, Inc. adapted similar policies— dropping to a minimum 580 FICO score. “There are folks who have steady incomes and a solid payment history but were temporarily affected by the economy or a life event in some way. “These challenges can lower their credit score significantly,” said Quicken Loans Inc.’s Chief Economist Bob Walters in a company statement. “We believe that a credit score, on its own, is not the sole arbiter of a person’s credit worthiness. This change will open up credit to a significant group of people and allow them to again have access to purchase or refinance a home.”

Such developments have been welcome news to FHA Commissioner David Stevens, who earlier this year urged lenders to lower their minimum credit score requirements to help the real estate industry as a whole. Stevens said that stringent requirements have constrained home sales by as much as 20% over the past year.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

June's Tri-State Real Estate Market Snapshot

Remember, the real estate market is like the weather forecast. It doesn't matter if it's raining in Florida or California since it's sunny in Chester County.The local market is what matters, even though the media reports only at the national level.

Keep in mind that there was a Federal Tax Credit last year which inflated a normal market. That is the main reason the numbers are slightly down in Chester County.

Click Here to see the full report from TrendMLS for Single-Family Homes. Carefully compare your county's real estate market compared to the national stats. You'll be amazed at what you see!

Interested in Condo Sales? Click Here to see what's going on in the condo market. It isn't as pretty as the single-family homes and is generally what happens during market corrections.

The Year-to-Date Market Snapshot contains statistical information for single-family and condominium listings recorded within TREND. This report is organized by county and contains year-to-date information for sales, prices and percentage changes for each of the last three years, so you can clearly see the annual trends in a particular market.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

Mortgage Points: To Pay or Not To Pay

If William Shakespeare financed a home today he’d probably ask on the subject of mortgage points: “To pay or not to pay? That is the question.”

Homebuyers direct the same question to their real estate agents. Here are some perspectives:

In its simplest definition, a point is an additional loan fee that is paid to the lender in exchange for a lower interest rate. It’s called “buying down,” and it allows you to reduce your rate for the life of the loan.

Let’s say you secured a mortgage loan for $500,000 without points, at 4.6% on a 30-year mortgage, your payment would be approximately $2,560 a month. If you paid two points ($10,000), the interest rate in this example would go down to 4.1% and the monthly payment would decrease to around $2,415, a savings of $145 a month.

In this scenario, it would take you about eight years to recoup the money you paid up front, so if you are planning on staying in your home a while, this will save you money in the long-run.
Home buyers must answer some key questions to determine if paying points is a wise decision. Specifically:
• How long will you keep the home?
• Do you have extra money to pay points?
• Could that money be better used for something else?

Money managers may suggest that a smarter option is to invest that $10,000 because you could do much better than your $140 savings, but you have to weigh the variables.

“Paying points depends on your career, your interests and all the things that predict your future,” said financial advisor Thomas Watkins of Total Mortgage Services in Milford, Conn. “Points are paid up front while your savings will be spread out into the future. Therefore, you get more benefit if you own your home longer, or if you don’t refinance for a long time.”

The rule of thumb when it comes to points is simple: If you plan to stay in the house for less than three years, do not pay points. If you plan to stay in the house for more than five years, pay 1 to 2 points. If you’ll be in the house for three to five years, paying points doesn’t make a significant difference.

Another important aspect to consider: Since points are interest-payment related, they are fully deductible on your taxes in the year that you close. See your tax advisor for details.

Mortgage points can add up to valuable savings over the course of your loan, but the future isn’t always predictable. Even if you “plan” on staying in your home for 20 years, changes in your career or family life could alter the plan.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com

Green Tips For Your Home

When it comes to preparing your home for sale in an environmentally friendly way, Kermit the Frog had it wrong. It is easy being green.

With so many homebuyers seeking green features in the homes they consider, sellers should create an eco-friendly atmosphere for the buyer, and that doesn’t always mean costly fixes.

It’s always nice for a homebuyer who’s been touring houses all day to find water or a snack waiting for them in your kitchen. Instead of leaving the customary bottled water, go the eco-friendly route and have a pitcher of filtered tap water at the ready. Add some organic fruits and vegetables and keep trash minimized. Also, use glassware and plates instead of plastic cups and paper plates. This practice is not only green, it shows class.

Talk with your agent about using recycled paper for all your brochures and advertisements around the neighborhood. Someone who is environmentally conscious will appreciate the effort.

Another way to act “green” is during your de-cluttering stage, when you remove furniture and other items from your home prior to the home’s listing. Instead of simply throwing out all those things you no longer want or need, you can recycle, resell at a garage sale, donate to a charity, or give away the items at the popular website Freecycle.com.

Big fixes around the home can go a long way, too. In this age of global warming and high-energy costs, more buyers are looking for houses that embrace energy conservation. The simplest upgrade is to replace all the light bulbs in the home with CFLs (compact fluorescents), which use a quarter of the electricity as regular bulbs.

To help with heating, make sure cracks are tightly caulked and leaks are sealed. Doing so can reduce your annual heating bill by $100, according to Department of Energy figures.

Justin Barnes, a policy analyst for the Database of State Incentives for Renewables & Efficiency, funded by the U.S. Department of Energy, said some of the easiest green fixes deal with appliance replacement. Most of today’s appliances are highly efficient and will reduce your energy bills. They’re also more attractive than their worn-out predecessors.

Barnes also suggests replacing doors and windows if the budget allows, and looking for better ways to insulate the home.

Also consider tankless water heaters, which are energy efficient and ultimately use less water during the heating process.
Don’t be afraid to boast about your green home and any recent enhancements. Working with your agent to highlight your eco-friendly features may just be what makes the difference in completing the sale.

Chip Plumley can be reached at (610) 444-9090 or (610) 357-8635.
Prudential Fox & Roach is an independently owned and operated member of
Prudential Real Estate Affiliates, Inc., a Prudential Financial company.
Equal Housing Opportunity.

ChipPlumley.com