FHA announces significant policy changes
The Federal Housing Administration (FHA) insures about 30 percent of new loans, and its health is vital for the housing market. But as foreclosures have risen, the government agency has seen its losses rise and its reserves sink below the minimum level required by Congress. According to the Mortgage Bankers Association (MBA) more than 18 percent of FHA borrowers are at least one payment behind or in foreclosure, compared with 14 percent for all loans. In addition, some unscrupulous operators have shifted their business to the FHA after the subprime business went bust. Last week, the FHA served subpoenas on 15 mortgage companies with suspiciously high default rates for FHA loans, part of a broad crackdown on dubious lenders. To address the problems, the FHA announced policy changes designed to more revenue into the agency, while at the same time keeping loans available.
The changes include: 1) homebuyers will Pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount, up from the current level of 1.75 percent. FHA officials also plan to ask Congress to increase the maximum annual premium that FHA can charge. Borrowers will still be able to wrap these fees into the total amount borrowed. 2) homebuyers will need a credit score of at least 580 to qualify. Borrowers with a score lower than 580 will need a down payment of at least 10 percent.
www.jdspropertiesmemphis.com
Thursday, January 21, 2010
Wednesday, January 13, 2010
better to pay with cash
It’s getting harder and harder for qualified buyers to get a loan to purchase investment property these days, so JDS Properties offers many affordable CASH ONLY properties for investors who have cash and want to invest in real estate. Some of the benefits of investing with cash in real estate as opposed to some other investments are: instant positive cash flow (usually of $600+ each month), instant equity (usually $15-30K), your investment is tied to a piece of property and not just a piece of paper, and tax benefits.
Our typical CASH ONLY investment property will cost around $30,000 with rehab included in that price, be rented for more than $700/mth, and have about $20k in equity.
Here is an example using one of our deals we have available in January 2010
800 Lydgate Memphis TN 38116 1,377sqft 3 bed 1.5 baths.
Purchase price of $33,000 (rehab included in price)
Projected monthly rental income $775/mth (9,300/yr)
Minus management fee 62/mth
Minus monthly taxes 90.75/mth
Minus monthly insurance 40/mth
Minus maintenance 60/mth
Minus vacancy 55/mth
= $467.25 positive monthly cash flow (5,607/yr)
=16.49 ROI
(467.25 monthly cash flow and a 16.49 ROI sure beats the stock market)
Our typical CASH ONLY investment property will cost around $30,000 with rehab included in that price, be rented for more than $700/mth, and have about $20k in equity.
Here is an example using one of our deals we have available in January 2010
800 Lydgate Memphis TN 38116 1,377sqft 3 bed 1.5 baths.
Purchase price of $33,000 (rehab included in price)
Projected monthly rental income $775/mth (9,300/yr)
Minus management fee 62/mth
Minus monthly taxes 90.75/mth
Minus monthly insurance 40/mth
Minus maintenance 60/mth
Minus vacancy 55/mth
= $467.25 positive monthly cash flow (5,607/yr)
=16.49 ROI
(467.25 monthly cash flow and a 16.49 ROI sure beats the stock market)
Monday, January 4, 2010
What's up with real estate in 2010?
What's up with real estate in 2010?
According to Michael J. Malpede, of Easy Forex, the rebound in US housing market is another potential positive for the outlook for the US economy. The US housing market has improved and shows sign of stabilization. The housing market will benefit because the inventory of new homes are at their lowest level in 17 years, but the outlook for housing remains uncertain. A number of analysts suggest that the housing market remains weak and that the recovery was driven by foreclosures and short sales. The Fed announced plans to add additional support to government mortgage agencies (Fannie Mae, Ginnie Mae, and Freddie Mac) and the tax credit for first time home buyers has been extended to April 2010. This could keep the recovery in US housing market going during the first half of 2010, but it's uncertain what happens to the housing market when the Fed stops buying mortgage-backed securities next year. Still-rising mortgage delinquencies signal more foreclosures. "Delinquencies are a precursor to foreclosures," said Cameron Findlay, chief economist at LendingTree.com, in an interview Tuesday. "We're not seeing any decreases in delinquencies, which is very concerning."
More people are falling behind on their monthly payments during the recession as unemployment hovers around 10%, and this figure isn't expect to do any wild dips in the immediate future. Earlier this week, Fannie Mae (FNM) said serious delinquency rates in its conventional single-family-home mortgage portfolio rose to 4.98% in October from 4.72% the previous month. A year ago, the rate stood at 1.89%. A wave of foreclosures would only add to the inventory overhang of unsold homes and delay a lasting recovery in residential real estate. In spite of all this, Moody's Investors Service upgraded its outlook on the U.S. home-building industry to stable from negative. It cited strengthening indicators like housing starts, sales, and improving home affordability. "The industry's recovery remains precarious, however, given the sizable number of potential foreclosed homes that might eventually come to market, as well as the anticipated continued decline in home prices in 2010," Moody
's said. "The U.S. government's support for the sector is a critical source of strength. A premature removal of government backing would put the industry's outlook at considerable risk of returning to negative."
visit www.jdspropertiesmemphis.com for great wholesale deals
According to Michael J. Malpede, of Easy Forex, the rebound in US housing market is another potential positive for the outlook for the US economy. The US housing market has improved and shows sign of stabilization. The housing market will benefit because the inventory of new homes are at their lowest level in 17 years, but the outlook for housing remains uncertain. A number of analysts suggest that the housing market remains weak and that the recovery was driven by foreclosures and short sales. The Fed announced plans to add additional support to government mortgage agencies (Fannie Mae, Ginnie Mae, and Freddie Mac) and the tax credit for first time home buyers has been extended to April 2010. This could keep the recovery in US housing market going during the first half of 2010, but it's uncertain what happens to the housing market when the Fed stops buying mortgage-backed securities next year. Still-rising mortgage delinquencies signal more foreclosures. "Delinquencies are a precursor to foreclosures," said Cameron Findlay, chief economist at LendingTree.com, in an interview Tuesday. "We're not seeing any decreases in delinquencies, which is very concerning."
More people are falling behind on their monthly payments during the recession as unemployment hovers around 10%, and this figure isn't expect to do any wild dips in the immediate future. Earlier this week, Fannie Mae (FNM) said serious delinquency rates in its conventional single-family-home mortgage portfolio rose to 4.98% in October from 4.72% the previous month. A year ago, the rate stood at 1.89%. A wave of foreclosures would only add to the inventory overhang of unsold homes and delay a lasting recovery in residential real estate. In spite of all this, Moody's Investors Service upgraded its outlook on the U.S. home-building industry to stable from negative. It cited strengthening indicators like housing starts, sales, and improving home affordability. "The industry's recovery remains precarious, however, given the sizable number of potential foreclosed homes that might eventually come to market, as well as the anticipated continued decline in home prices in 2010," Moody
's said. "The U.S. government's support for the sector is a critical source of strength. A premature removal of government backing would put the industry's outlook at considerable risk of returning to negative."
visit www.jdspropertiesmemphis.com for great wholesale deals
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