Delayed Home Loans For Cash Buyers

icon_sellersGood news for cash homebuyers wanting to get home loans quickly after purchasing a home. You can get a cash-out refinance almost immediately, thanks to a little known Fannie Mae program. The delayed financing program allows all-cash homebuyers to refinance and take equity out as soon as they close on the home purchase.

That’s good news for homebuyers in all-cash purchases, many of which are investors or baby boomers trading down to more manageable homes. The delayed financing program gives them the option to take home even more cash while enjoying historically low interest rates on a conventional home loan.

The program comes with rules such as the sale must have been “arm’s length” (no parents selling to children), the owner can’t have more than 10 financed properties and there can’t be any other liens against the property. Why would a homeowner use the delayed financing program instead of waiting the six months to tap equity?

  • A property may be in such disrepair that a lender won’t underwrite it. With this program, a homebuyer can buy the property, make quick repairs and take money out of it before six months elapse.
  • The chain of buyers and sellers might have irreconcilable timing issues.
  • It can be used as a tactical advantage in a hot market. Many sellers would rather accept cash offers over those with a financing contingency, sometimes even when the cash offer is lower. The program allows homebuyers to present a cash offer, then replenish their liquidity once the deal is done.

Source: Mortgage Daily

Is Buying or Renting Right for You?

Homeownership builds wealth

Learn more about building wealth through home ownership by entering to win this month’s real estate book.
Beginner’s Guide to Building Wealth Buying Houses.

Homeownership is not for everyone, but it may be the best way for most working families to build long-term financial security and independence. Here are three simple ways homeownership builds financial security for you and your family.

  • Equity: The principal amount included in your monthly mortgage payments reduces the outstanding loan building equity you would not have from monthly rent payments.
  • Appreciation: While real estate markets may experience temporary downturns, homes typically appreciate in value. Over time your wealth grows as your home becomes more valuable.
  • Tax Savings: You build wealth when you have a mortgage because the Federal government allows a tax deduction for all the interest you pay on your mortgage. You build wealth by paying less in taxes each year you pay mortgage interest.

Which route is right for you? Ultimately, the answer depends on your financial situation, your future plans and the lifestyle you wish to live.

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Beginner’s Guide to Building Wealth Buying Houses

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The Markets

orra_housing-marketRates rebounded in the past week but stayed near their lows for the year. Freddie Mac announced that for the last week in October, 30-year fixed rates rose to 3.98% from 3.92% the week before. The average for 15-year loans increased to 3.13%. Adjustable rates were also higher, with the average for one-year adjustables moving to 2.43% and five-year adjustables increasing to 2.94%.

IS FHA Home Flipping Waiver About to End?

That’s an important question for buyers, sellers, investors and realty agents who’ve taken part in a nationwide wave of renovations and quick resale using Federal Housing Administration-backedOD_Blogger loans during the last four years.

The answer is yes — get your rehabs done soon. The federal agency whose policy change in 2010 made tens of thousands of quick flips possible — is about to shut down the program.

In an effort to stimulate repairs and sales in neighborhoods hard hit by the housing crisis and recession, FHA waived its standard prohibition against financing short-term house flips.

Under the waiver of the rule, you could buy a house, fix it up and resell it as quickly as possible to a buyer using an FHA residential loan — provided that you followed guidelines designed to protect consumers.

According to FHA estimates, about 102,000 homes have been renovated and resold using the waiver. The program has done its job, stimulated billions of dollars of investments, stabilized prices and provided homes for families who were often newcomers to ownership.

Even though the waiver program has functioned well, officials say, inherent dangers exist when there are no minimum ownership periods for flippers. Officials say it’s time to revert to the more restrictive anti-quick-flip rules that prevailed before the waiver:

The 90-day standard will come back into effect after Dec. 31.

Source: Ken Harney, The Nation’s Housing