5 Reasons to Sell Before Spring

I am a big proponent of not waiting until Spring to list your house, this year in particular due to the even more severe shortage of inventory than normal.  This article, from http://www.keepingcurrentmatters.com, explains why.

Many sellers feel that the spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the fall and winter have their own advantages. Here are five reasons to sell now. 

Only Serious Buyers Are Out 

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere 'lookers'. The lookers are at the mall or online doing their holiday shopping. 

There Is Far Less Competition 

Housing supply always shrinks dramatically at this time of year. The choices for buyers will be limited. Don't wait until the spring when all the other potential sellers in your market will put their homes up for sale. 

The Process Will Be Quicker 

One of the biggest challenges of the 2013 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers. 

There Will Never Be a Better Time to Move-Up 

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 25% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with historically low interest rates right now. There is no guarantee rates will remain at these levels in years to come. 

It's Time to Move On with Your Life 

Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

Thanks to Kim Jones from Fidelity Bank for passing along this great article! 

New Lending Changes Coming in 2014

1. If you don't know what "QM" and "ATR" stand for yet, now is a good time to learn because you are sure to hear a lot about them in the months ahead. QM stands for "Qualified Mortgage" and ATR stands for "Ability-to-Repay." They need to be on your radar screen because they are the center-piece of a new set of mortgage rules set to roll out on January 10, 2014 that are a requirement of the seemingly never-ending Dodd-Frank Wall Street Reform and Consumer Protection Act. Attached is a thorough overview of the rules but below is a briefer summary of the key things you need to know.

2. Effective with the new set of rules, lenders will only be able to offer "Qualified Mortgages" that meet "Ability-to-Repay" standards. The intent is to eliminate many of the risky mortgage programs that caused the mortgage collapse five years ago.  Obviously, there are many politicians clueless to the fact that the industry has already naturally reacted and even over-corrected. Nevertheless, expect even more underwriting scrutiny moving forward as there is more at stake than ever for lenders to substantiate and document a borrower's income, debt, credit, and assets. Needless to say, there will only be "full doc" loans offered in the future.
3. Outlawed loan types moving forward include negative amortization, interest-only, balloons, and amortization periods over 30 years. No major losses on this list.
4. The most threatening new rule is a cap of 43% on the debt ratio. You are certain to hear a lot about this new cap but be aware that for the next seven years this cap does not apply to any Conforming, FHA, VA, or Rural Housing loans that get an automated approval. Fortunately, this is most of the loans made in 2013! Not sure what the significance of seven years is but unless this is overturned, the number of loans lenders can make is going to drop a lot in 2021 because a large percentage of loans made today do have debt ratios over 43%. For now, the greatest impact with this cap will be on Jumbo loans > $417,000.
5. A few other rules worth mentioning:

• There will be a cap on the points and fees that lenders can charge of 3% of the loan amount for loans > $100,000. Up to two additional discount points that are used to buy down rate will be allowed. There is ongoing discussion about which fees are part of the 3%. In its current state, this rule will give the consumer fewer mortgage options which is not a good thing. For example, programs that allow the borrower to pay for the PMI in advance rather than monthly might no longer be allowed.

• ARM loans must be underwritten at whatever the maximum possible loan rate is over the first five years of the loan.

• Another victim of this law is the Conventional 3% down loan. The minimum down for all Conventional loans moving forward will be 5%.

6. One of the key components of the new rules is the fact that borrowers who have been foreclosed on will actually have the ability to sue lenders claiming that they did not have ability to repay. Lenders have a "safe harbor" from such lawsuits, however, if they properly document loans and keep the interest rate on the loan within 1.5% of the "Average Prime Offered Rate" (APOR). You can bet that lenders will be going to a lot of trouble to only offer loans that meet the safe harbor requirements.  

Thanks to my buddy Mark Moore with Shelter Mortgage for this info!

Great article about some important things for Buyers to know when looking for a home. It claims that these are items an agent won't tell you, but my clients get all this information from me up-front!

10 Things Your Real Estate Broker Won't Tell You

How the Government Shutdown is affecting real estate transations

The government shutdown has long-reaching impacts, particularly on the lending side.  Here are some of the highlights:

Internal Revenue Service (IRS)The IRS is closed and has suspended the processing of all forms, including requests for tax return transcripts (Form 4506T). While FHA and VA do not require these transcripts, they are required by many lenders for many kinds of loans, including FHA and VA, so delays can be expected if the shutdown is protracted. We have received indications that many loan originators are adopting revised policies during the shutdown, such as allowing for processing and closings with income verification to follow, as long as the borrower has signed a Form 4506T requesting IRS tax transcripts. On loans requiring a Form 4506T Fannie Mae and Freddie Mac have also adopted relaxed provisions allowing closings but subject to tax transcript verification before the GSE’s purchase the loans. 

Social Security Administration (SSA)The Social Security Administration is closed and has suspended most customer service functions. According to the SSA Contingency Plan, verifying Social Security numbers through the Consent Based SSN Verification Service will also be suspended during the shutdown, a further complication for mortgage processing. As with IRS income verification, policies vary among lenders, with many choosing to exercise forbearance during the shutdown period subject to subsequent verification. Fannie Mae and Freddie Mac have also adopted policies to allow for closing subject to subsequent verification and before GSE purchase of the loan.
Federal Housing AdministrationHUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program, but it will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate. You can expect some delays with FHA processing. 

VA Loan Guaranty ProgramLenders will continue to process and guaranty mortgages through the Loan Guaranty program in the event of a government shutdown. Expect some delays during the shutdown.  

Flood InsuranceThe Federal Emergency Management Agency (FEMA) confirmed that the National Flood Insurance Program (NFIP) will not be impacted by a government shutdown, since NFIP is funded by premiums and not tax dollars. Changes to the flood insurance program scheduled to take effect on Oct. 1 will be implemented as scheduled. 

Rural Housing ProgramsFor the U.S. Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees, and modification approvals. Thus, lenders will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA Underwriter approves the loan. If a commitment was already issued, the funds were already set aside and the lender may close the loan at its leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.
It is important to note that the traditional definition of “rural” for qualifying communities for assistance will be continued in effect during the shutdown.  We expect that language to continue the current definition will be included in whatever funding measure is eventually enacted. 

Government Sponsored EnterprisesFannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency, since they are not reliant on appropriated funds. 

TreasuryThe Making Home Affordable program, including HAMP and HAFA, will not be affected as the program is funded through the Emergency Economic Stabilization Act which is mandatory spending not discretionary.

Several sources predicting a continued rise in home prices!

The past 6 months have seen a real surge in the housing market.  I know I personally have been swamped, which is fantastic!  Inventory is incredibly low and homes are selling faster and for more money than I have seen in years.  Recently several national sources have come out with studies supporting what I have personally been seeing and predictions that this great market will continue. Great news!  If you have been considering selling your home, now is the time! Most of my listings since November have sold in less than a week and for at least 98% of the list price (if not OVER list price).  I would love to help yours do the same!

Check out these articles for more information about the improved housing market we are seeing:

Fannie Mae: Confidence in Home Price Gains Reaches Record Levels

Firm Forecasts 8% Increase in Prices, Decrease in Mortgage Rates

CoreLogic: Home Prices Post 12.1% Annual Gain in April

How to pick the right mortgage

Great flow chart to help you figure out what your best loan option is!

Compliments of one of my favorite lenders, Kim Jones with Fidelity. If you have any questions, please contact her: kim.jones@lionbank.com

New changes to FHA loans

There are some changes coming up in FHA that you should know about.  As you may or may not be aware, FHA has implemented numerous increases to their monthly MI and the Up Front MIP since 2009.  They are doing it again and so FHA continues to be the "loan of last resort".  Since the increases started, my lenders have been consistently avoiding FHA for borrowers who have other options, since it is more expensive.  FHA is notorious for changing this stuff at the last minute, but for now here is what we expect...

(There are some slight variations to the bullet points below for 15 year FHA loans or if clients put more than 5% down, but that is a VERY small percentage of FHA borrowers, so these are the changes most borrowers will experience)

• The monthly MI will increase to 1.35% of the loan amount (divided by 12) for most FHA loans.  So a $200,000 30 year fixed FHA loan will have monthly MI of $225.00 (about double conventional)  - This will be effective with all FHA case numbers pulled after April 1, 2013
• The Monthly MI will not be able to be dropped under any circumstances for the life of the loan. It doesn't matter if they pay the loan down or if the home doubles in value, borrowers will still have to pay monthly MI until they sell, refinance, or pay the loan off.   This will be effective for all FHA case numbers pulled after June 3rd, 2013.

The Up Front MIP will remain the same at 1.75% of the loan amount and is still non refundable for any reason.  


Information compliments of one of my favorite lenders, Mark Moore. Thanks, Mark!

Georgia Housing Starts 2013 on a High Note!!!

Housing Indicators for January show a good start for Georgia in 2013. GAR just released the January report.  Some key findings include:

• New Listings decreased 9 percent
• Pending Sales were up 21 percent
• Inventory Levels shrank 32 percent
• Median Prices rose 28 percent
• Average Prices rose 18 percent
• Months Supply of Homes for Sale decreased 37 percent
• Days on Market decreased 13 percent to 89 days

I know this jives with my personal experience as well: inventory is down, prices are up, and houses are flying off the market!  All of my listings from the past 90 days have sold in under a week, most for list price (or higher!).  So if you have been on the fence about selling your house, now is the time and I would love to help!

It's that time of year again: Homestead Exemption

If you purchased a home in 2012 as your primary residence, it is time to file for your Homestead Exemption!

A homestead exemption is a reduction in homeowners' property taxes. Once granted, this exemption is automatically renewed each year as long as you continually occupy the home under the same ownership. The home must be your legal residence for all purposes including the registration of your vehicles and the filing of your income tax. You cannot file for homestead exemption on rental property, vacant land, or on more than one property.

*If you previously had Homestead Exemption on another property, you must also contact that county to remove it before you can apply for Homestead on your new property, even if you no longer own the other property*

Different counties have different deadlines for filing, but most are April 1st. CHECK YOUR COUNTY TAX ASSESSOR WEBSITE TO VERIFY YOUR DEADLINE AND FILING REQUIREMENTS.

Here are some links to counties in the Metro Atlanta area for your convenience:

Fulton County

DeKalb County

Cobb County

Gwinnett County
Walton County