The Real Estate market in Baltimore feels like a spring market even though we are still in February. January was just as competitive. 80% of my clients have gone up against multiple offers. I have a client that want to submit an offer on a property in ...

Naji Rashid's Blog - 5 new articles


Spring Has Sprung Early!

The Real Estate market in Baltimore feels like a spring market even though we are still in February. January was just as competitive. 80% of my clients have gone up against multiple offers. I have a client that want to submit an offer on a property in Baltimore County today, and the listing agent has informed me that she has received 6 offers between yesterday and today. The seller will be reviewing offers tomorrow. I believe it will be even more competitive in the spring. The main reason the competition is so fierce is because we have low inventory of properties so the really nice ones sell quickly and usually for a little more than asking price. If you are going to compete in this market here a couple of things you need to do.

1. Get Pre-approved now. You don’t want to lose out on a property because you could not get a pre-approval letter in time to get your offer submitted.

2. Make sure you are working with a full-time agent who can get you out quickly to see a property and get your offer submitted. Sometimes a couple of hours can be the difference between you getting your offer accepted or you lose the property to another buyer.

3. Put your best foot forward first. Submit your best offer because you might not get a second opportunity at the property.

4. Don’t become attached to any property you submit an offer on because you might not win your first one.

    
 


FHA Guidelines on Student Loans Changing June 30, 2016

The FHA guidelines on student loans is changing again effective June 30, 2016. I believe this is going to have a big impact on buyer’s purchasing power. If you have student loans and have been pre-approved. I would highly recommend that you re-examine your pre-approval amount with your lender if you plan on purchasing after July 1st. FHA seems to be getting tougher on student loans which could mean that they are seeing higher default rates for buyers that have student loan debt.

Last year before September 2015, your lender could exclude student loan debt if you could show it was in forbearance or deferment for 12 months from the date of your settlement. In September 2015 FHA changed the guideline again.

The new guideline starting this month is lenders must use the GREATER of, 1% of the outstanding balance on the loan or the monthly payment reported on the borrower’s credit report OR the actual documented payment providing the payment will fully amortize the loan over its term.

Here is an example of how this will affect a buyer’s purchasing power. A buyer owes $40,000 in student loan debt. The payment base on 1% of the balance of $40,000 is $400 per month. The lender will have to add $400 to the buyer’s monthly debt when qualifying. This can have a big impact on a buyer’s purchasing power.

 

 

    
 


Federal Home Loan Bank (FHLB) is Back! $5,000 Forgivable Grant!

Federal Home Loan Bank of Atlanta first-time home buyer grant program is back! All buyers must contribute a minimum of $1,250 into buying their home, and those funds can actually be gifted as well. This grant is forgivable after 5 years. If a buyer sells the property prior to 5 years then the grant is forgiven at 20% per year. FHLB does not cap out the buyer’s debt ratio at 45% like most other grant programs. The buyer does their home buying counseling over the phone for this program. FHLB can also be combined with other first-time home buyer grant programs. All banks or lenders do not participate in this program. You can contact me for a list of mortgage companies or lenders that participate. 

    
 


Maryland Grand Slam Program for Baltimore City!

Effective September 2, 2015, Maryland is offering four special incentives (hence the name Grand Slam) for borrowers who are purchasing a home in Baltimore City. The Maryland Grand Slam Program in Baltimore City is open for reservations until the allocated funds for the grants are expended. The remaining balance of these funds will be posted daily in a flashing bulletin on Lender Online.

 

Incentives & Highlights are Listed Below:

First Base: the interest rate is 1/4% below the regular MMP interest rate for a conventional or government loan, whichever is applicable.

Second Base: $5,000 outright grant for down payment and closing costs from the state of Maryland.

Third Base: $2,500 outright grant for down payment and closing costs from Baltimore City.

Home Plate: $450 CDA Mortgage Credit Certificate (MCC) fee waived for an MMC associated with an MMP loan under the Maryland Grand Slam.

 

*Property must be in Baltimore City*

*Grants under the Maryland Grand Slam cannot be combined with matching funds from CDA Partner Match Programs*

*The entire city of Baltimore is a targeted area and therefore, someone buying a home in Baltimore City does not have to be a First-Time Homebuyer; however, they cannot own real property at the time of closing*

*The income limit for a one or two member household is $108,600 and $126,700 for a three or more member household*

*A CDA-approved lender must originate the loan*

*The maximum loan amount is $417,000*

If you have any questions contact me at 410-977-7176.

    

New FHA Guidelines Starting September 14, 2015

Deferred Student Loans:
 The old guidelines said we did not have to count student loan debt if we could show the student loans deferred for 12 months.  The new guidelines states they must be counted regardless of the deferment period.  Lenders will be required to use the actual payment for qualification or if the payment is unknown, 2% of the outstanding balance of the loan to calculate the payment.  
What does this mean for your buyers?  They will qualify for LESS because we have to count more debt against them if they have student loan debt.
Charge-Off’s:
 The old guidelines allowed charged off debt (debt that has been written off by the creditor) to be excluded without counting a payment against the buyer for it or requiring it to be paid prior to closing.  The new guidelines will still allow for it not to paid but will require lenders to document why the charge-off exists, document reason for approving the loan, obtain a letter of explanation and supporting documentation behind the charge-off.
What does this mean for your buyers?  Tougher underwriting guidelines that are not as forgiving and more documentation requirements for buyers with charge-off debt.  
 
Frequent Job Changes:
 The old guidelines allowed a buyer to change jobs multiple times as long as they were advancing in income or benefits.  The new guidelines state that if a buyer changes jobs more than 3 times in the prior 12 months or has changed their line of work the lender has to provide transcripts of training and education demonstrating qualification for the new position or employment documentation evidencing continual increases in income and/or benefits.
What does this mean for your buyers?  Tougher underwriting guidelines that require more documentation for someone who changes jobs frequently in the 12 months prior to a mortgage application.  
Installment Debt Less Than 10 Months:
 The old guidelines stated that an installment debt less than 10 months may be excluded from the buyer’s debt ratio. The new guidelines state that the debt may be excluded only if they have a cumulative payment of less than or equal to 5% of the borrower’s gross monthly income and the borrower may not pay down the debt to achieve this percentage.
What does this mean for your buyers?  Buyers may potentially not qualify for as much if they have installment debt that is ten months or less.
    

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