Jim's Soap Box April 2009

JIM'S SOAP BOX

Arizona Real Estate Newsletter - April 2009

First things first - Sorry for the huge delay in this newsletter, but I have been a little busy. I am proud to announce that I have a new home to hang my mortgage hat. I have officially returned to NOVA Home Loans, and couldn't be happier!

The advantages I had operating as a mortgage broker eventually paled in comparison to what NOVA offers as a Mortgage Banker. The best way to summarize the motivation for this move is that I now have more control over each transaction, more support, and better rates. Please take note of my new contact info.

The goal of my newsletter is to provide educational material mixed with Jim's unsolicited yet fascinating opinion on the Arizona housing market and real estate ownership in general. If you would like me to address a specific topic in the future, please email it to me and I will respond in the following newsletter.


If you are looking to buy now, you should be looking FHA.

Most people who are looking to buy in this market would like to have a small down payment (who wouldn't - right?). Conventional lending in Arizona has become unattractive to the first time home buyer. With a conventional loan you are looking at a minimum of a 10% down payment, and a FICO score of 680 or higher. If your credit score is currently below a 680 (you cannot qualify to purchase mortgage insurance) and will need a 20% down payment. Unless you recently hit the Powerball - I'm guessing you don't have 20% down.

A FHA loan (Insured by the Federal Government) has a down payment of just 3.5%. And, buyers can still qualify for a FHA loan with FICO scores as low as 580. The rates for FHA are very competetive to conventional rates, and the monthly mortgage insurance is cheaper as well. Another strong advantage is that your 3.5% down payment can be a gift from a third party.***

There are additional FHA programs and features that are getting a lot of attention.

There is a $100 down payment program if you are buying a HUD owned home.
There is a FHA Rehab program (203K) that allows you to buy and fix-up a property at the same time. This will allow you to buy the $75,000 fixer-upper and finance $25,000 in upgrades at the same time. The rate is so competetive on this program that you will not have to refinance when the repairs are completed.

All FHA loans allow up to 6% in seller concessions to pay for your closing costs. This allows you to get into the home for only the 3.5% down payment & not a penny more. Many people use this money to buy their interest rate down as well.

FHA is no longer considered the "other option" if you do not qualify for a conventional loan. It is actually the preferred loan program for Arizona and probably financing 80% of today's purchases.



*** Moms & Dads - today is a great day to help your kids buy their first home. With thousands of homes for sale in Maricopa County for well under $100,000 - It's cheaper than renting & you can finally get them out of your house.



Jim Cunningham
Sr Loan Officer
NOVA HOME LOANS
8800 E Raintree Drive #180
Scottsdale, AZ 85260
480 614-6413
480 434-8261 cell
jim@novahomeloans.com