It seems as though the American dream of owning a home seems to have eroded a bit over the past few years. Time magazine in September wrote a story about the case against homeownership. Given this article, I thought it would be appropriate to suggest some reasons why buying a home heading into 2011 is still a good idea.

Top Reasons For Buying a Home in 2011

• Mortgage Programs – Mortgage programs like VA loans and FHA loans still offer stable mortgage programs and low competitive interest rates – especially if you are a first time home buyer and have decent credit.

• Tax Advantages – Mortgage interest and other expenses associated with buying a home are tax deductible and in some states you can still get tax credit for buying a home as a first time home buyer or for buying a home in an economically depressed area.

• Down Payment Assistance Programs – There are plenty of down payment assistance programs available to first time home buyers and those home buyers who qualify for an FHA home loan. Most of these programs provide money to be used for down payment and/or closing costs with few strings attached.

• Low Interest Rates – Barring any radical changes in the economy, the jobs market and the housing market it looks like mortgage interest rates will remain near record low levels which means very affordable mortgage payments.

• Large Inventory – While it may seem like having a huge inventory of homes on the market speaks to a continued decline in home values – what it speaks louder to is an incredible amount of choices. There are a lot of homes for sale which means you are likely to find something to fit your family’s needs.

• Low Home Prices – While the real estate and financing industry debacle has been bad for many people, if you are in the market for buying a home, you can get a great deal on a much larger home than you could have just a few years ago. My suggestion is that you learn from the lessons of the past and don’t over buy your home, but you can get much more of a house with the low prices – especially when you factor in the low mortgage rates.

These are but just a few of the good reasons for why buying a home today is a good idea – although it may not be the American Dream any longer. If you have questions about buying a home in 2011, please give me a call.

Ever thought about endeavoring to apply for an Arizona refinance ? Lots of people have gone beyond just answering yes, and have now actually started to take action. Comparatively few people ever take the time to think it through seriously. Many don’t try because they do not fully understand how to start. Being convinced that it’ll require too much time discourages some others. Others are too lazy to try, or don’t have motivation.

Now “Whoa Up” here a moment, my friend! Those aren’t valid reasons behind making a significant decision like this! Were the reasons in favor considered? Did both the Pro as well as the Con side get taken into account? The disadvantages were considered, but what about the advantages?

Perhaps that needs a bit more contemplation. Perhaps we ought give consideration to say, five reasons why maybe you should applying for an Arizona refinance through the streamline program and work these into your decision process.

To start off, this version of the Arizona Refinance does not require an appraisal. Right, I fully understand your comment that so many of us are upside down in our equity. Yes, that’s a very good point. But look at this, the FHA Streamline Refinance lets us get that new loan and get into some of these crazy low interest rates. Even more, you should consider that this also saves you about $450 for not having to buy that silly appraisal.

Second, when applying for this Arizona Refinance you do need to show a source of income, but not an amount you earn. The reason that is true is that if the amount you earn now is different that it was when you got your original FHA Loan, it’s not part of the qualifying process. That is truly why, as many have noted, even if you are unemployed, as long as you can prove you are earning unemployment, you will qualify. This makes qualifying for the FHA Streamline Refinance easier.

Third, there is less work, less processing, less underwriting, less costs and a whole lot less stress. And you’ve already qualified for the FHA Loan once. So as long as you have maintained a decent credit profile and still have a source of income your original qualifying carries over into your new Arizona Refinance!

Fourth, we’re able to get discounts for this Arizona Refinance from Title, Escrow, the Lenders and even on our processing. And for larger loan amounts, there may be an option for us to cover all the closing costs.

Fifth, you get to skip a payment. After you do the Arizona Refinance, your first payment will be due on the 1st of the month that is at least 30 days in the future.

Now, take a look at all of those reasons and appraise them. You’ll be able to see that a persuasive case exists for starting to search for methods to apply for an Arizona refinance through the streamline program.

Simply roll that around in your mind for a while. Do you not think that that maybe, just perhaps, you really ought to apply for an Arizona refinance through the streamline program ?

Realize easy methods to apply for the Arizona refinance streamline program at our Academy Mortgage web site at az-refinance.com.

Recently  USDA Loans in Arizona have continued to be funded based on the ability to obtain a Conditional Commitment Letter from the local Rural Development Office.  However, not all lenders have been willing to continue funding USDA Loans off of a Conditional Commitment Letter causing many home buyers to have to wait. What are USDA Loans? A USDA Guaranteed Loan is a Government insured 100% purchase loan. These loans are only offered in rural areas and serviced by direct lenders that meet federal guidelines.  

Over the past several months, when a USDA Loan has been funded the USDA Loan application had to go through a Manual Underwrite which eliminated many of the available underwriting waivers and made it more difficult to obtain the USDA Loan approval.

It has been announced that beginning September 8th, approved USDA lenders will be able to use the Government Underwriting System and will no longer be required to manually underwrite USDA Loans.

What this means to the prospective USDA Loan home buyer:

1. Underwriting will now by automated. The underwriting of a loan is the process by which the lender determines whether the loan is a good investment of capital. The process involves a simultaneous analysis of the creditworthiness of the borrower and the economic value of the property as an income-producing investment. If the borrower is creditworthy and the property has sufficient value under existing market conditions, the lender can enter into the loan with reasonable confidence that the investment will be a good one.

2. Credit and Debt Ratio waivers will be available. However, you must have a credit history that indicates a reasonable willingness to meet obligations as they become due.

3. It will be less restrictive for borderline applicants and easier to get an approval

4.Funding will return for banks that earlier refused to fund USDA Loans

If you think your property is able to qualify for a USDA loan please don’t hesitate to contact me to find out more today! Whether you live in Phoenix or any of the surrounding cities, I am the the person who can help you get your loan closed (in as little as ten days!) no matter how challenging the situation.

Thanks to the FHA streamline program, it is possible to lower your interest rate and get a lower mortgage payment each month without having to completely re-qualify for a new loan. FHA streamline refinance changed last fall, but it is still viable to do an FHA streamline with no appraisal required. This is designed for those who are looking to refinance, but who owe more on their mortgage than their home is actually worth.

Can you still take advantage of lower interest rates and refinance even if you owe more on your mortgage than your house is now worth?  You now can do a FHA streamline refinance without an appraisal and have it still make sense financially.

It is true that HUD made it typical that if a borrower opted to not have an appraisal, it meant they couldn’t refinance their closing costs — they would have to bring them to close, but with rates as low as they are now it is possible that you can choose a slightly higher than normal rate and have your mortgage lender pay for the closing costs.

With an FHA streamline without appraisal, you can reduce your closing costs because there is no appraisal cost, and your lender can cover some of the costs. Most of the people who do the FHA streamline refinance without an appraisal bring their mortgage payment that they would have deferred (some people call it skip) to close. Most often, when a person participates in the Arizona FHA streamline program, they will still be in a FHA 30 year fixed rate loan with an interest rate that is lower than what they had before.  Often this reduced interest rate can mean hundreds of dollars of savings each month in interest.

There is no better time to act than now to reduce your current interest rate through the FHA streamline refinance program without an appraisal. Just ask your loan officer about the FHA streamline without appraisal program.

Ever day-dream about how exactly you could apply for a VA loan ? That thought has occurred to a lot of people. Some have even taken action to help make that happen. For many it is just a passing speculation, not really a serious thought, and so they just dismiss the thought. It is sometimes because they do not know where do you start. In other cases it is because it is just a big unknown. Still other times it’s as they do not know the various requirements.

Hold up a minute and let’s relax a bit. Let’s think this through. Here are 3 reasons to consider why you should apply for a VA loan.

Firstly, on the positive side, allow me to point out that they can provide up to 100% loan financing. Ok, I hear your objection that you can only get the loan if you’re a veteran. It is a valid objection, I agree. However, let me make the point that if you’re a veteran with a loan certificate of eligibility, this is the loan for you!

Secondly, you truly should consider that there is no pre-pay penalty on VA loans. And, also, there is no mortgage insurance requirement. Plus, even better, you can roll closing costs into your VA mortgage.

Third and lastly, you will get a great loan option. And that will result in homeownership. On top of that, you can refinance with a VA streamline in the future if needed.

Within all of the above info lies a pretty good group of reasons in support of applying for a VA loan. What do you think?

Ponder over it. Maybe you really, in all seriousness, should apply for a VA loan.

Realize how one can Apply for a VA loan by going to this website web site at www.tendayclose.com/.

The Arizona Republic reports that Americans’ credit scores are sinking to new lows.

FICO, Inc figures show that 25.5% of consumers have a credit score below 600. That’s nearly 43.4 million people. A credit score that low makes it near impossible for them to get a credit card, mortgage loan or auto loan.  All figures were taken from their April reports.

Consumers have relied heavily on debt in recent years to fund their spending habits, and one reason for the slow economic recovery is their now restricted access to credit.

Additionally, FICO shows an increase of 2.4 million people in the past two years falling in the lowest credit-score categories.

Before the Great Recession, scores on the FICO 300-to-850 scale weren’t as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis. Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on myfico.com.

More are expected to fall to these low levels in the coming months since it can take several months for delinquencies to make it to one’s credit report. The Labor Department shows that 26 million people are out of work or are underemployed. Millions of people are facing foreclosure which alone can drop 150 points off of a credit score. This type of damage takes years to correct regardless of prior credit history.

On a more positive note, consumers with scores above 799 have increased, too. It at least shows that more individuals are paying down debts and curbing their spending in the wake of the recession.

Here are the current credit score rankings:

• 799 and above make up 17.9%
• 650-699 make up 11.9%
• 600 and below are 25.5%

“In the past too much credit was handed out based on scores alone, without considering how much debt consumers could pay back, said Edmund Tribue, a senior vice president in the credit-risk practice at MasterCard Advisors. Now, the ability to repay the debt is a critical part of the lending decision. Ritch Workman, a Melbourne, Fla., mortgage broker, thinks credit scores alone play too big a role. “The pendulum has swung too far,” he said.

Increased lender regulations place high value on one’s FICO score because it is a reflection of one’s financial health, aiding in assessing the risk. FICO scores can have a serious impact on mortgage interest rates as well. Sometimes, there are simple ways to repair you score if you’re thinking of applying for a mortgage loan.

Decisions, decisions. Which car should I buy? Should I get a Mac or a PC? And most important, what should I have for lunch?

For now, I’ll leave these decisions up to you. Seriously though, one decision that I can give you some information on to make your choice easier is should you get a Roth IRA or a Traditional IRA?

Why am I giving you this information?

First of all, since I’m a mortgage guy, I think this is relevant information to you if you ever need assistance with a down payment and you’re a first time home buyer. What’s below will give you some basic information about how you can use an IRA to fund your down payment.

Second, I’m only going to generally cover one important similarity between a Roth IRA vs. Traditional IRAs and also cover some of the basic differences to help your decision process about what type of IRA you may want to get. But since I’m not a “real” tax preparer or licensed financial planner you’ll want to cover what I’m laying out here with a qualified individual of your choice to discuss your specific situation.

Traditional IRA basics

Funds added to a Traditional IRA are tax deductible. That means, realistically, that if you earn $40,000 a year and put $2,000 into your Traditional IRA, you will pay taxes on only $38,000 for that tax year. Your money grows tax free, and when you withdraw it, only then will it be taxed at your usual income tax rate.

If you withdraw the funds before you turn 59 1/2, you will have to pay both income taxes and a 10% penalty.

Roth IRA basics

Roth IRA funds are not tax-deductible. In the example above, you would pay taxes on the entire $40,000 for that tax year.

However, when you begin to withdraw the money from your Roth IRA, none of the earnings are taxed as long as the IRA has been open for more than 5 years and you are over 59 1/2. That means with a Roth IRA, the interest your money has earned is never taxed. You only pay taxes on the initial principle you have deposited.

The Roth IRA is available if you don’t exceed a certain level of income each year. Incidentally, these amounts can change each year so you will want to check to make sure your income doesn’t exceed the program guidelines .

As with the Traditional IRA, if you withdraw money early, there is a 10% penalty.

Now here’s where it gets interesting. There are exemptions to the early withdrawal penalty, and I’d like to tell you about one of them.

One of the tax benefits enacted by the 1997 Taxpayer Relief Act is the ability to withdraw IRA money to make a down payment on a home. That is, if you are a first-time home buyer, or have not owned a home within the last 2 years. The lifetime limit for withdrawal is $10,000. The withdrawal can also be used to fund a down payment for the IRA owner’s spouse, children, grandchildren, or parents.

So, to make it easy for you, while the Traditional IRA is tax-deductible, the Roth IRA’s earnings are tax-exempt, making it a great saving tool. And no matter which one you decide on, you can use the first-time home buyer exemption to get into the home you’ve always wanted.

The New York Times reports that 1 out of 7 homeowners with loans in excess of millions of dollars are seriously delinquent compared to 1 out of 12 for those below the million-dollar mark.

According to CoreLogic’s real estate data, the less lavish the housing, the more likely the homeowner is to continue paying their lenders.
The research suggests that many of those well-to-do delinquent homeowners are purposely letting their financially draining investment properties go.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

There were 5 properties in Los Altos that were scheduled for foreclosure auctions recently—4 of them have unpaid mortgage debt in excess of $1 million, the highest amounting to $2.8 million.

In Las Vegas, longtime agent for luxury properties, Ken Lowman said that in June, 4 out of his 11 luxury home sales were distressed properties.

“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.” The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.

Los Altos is one of the most exclusive towns in the country with a median home price of $1.5 million. Many of the houses scheduled for foreclosure auctions were still occupied.

Many lenders are fearful that more distressed homeowners will walk away from their mortgages. There are currently around 11 million homeowners who are upside down in their mortgages. This is especially worrisome if the housing market weakens again as many recent reports have suggested.

Fannie Mae and Freddie Mac have issued similar pleas, encouraging struggling homeowners to find ways to stay in their mortgages.

The shaky news of the latest economic trends is leaving some investors with more reasons to sell, according to CNBC and Reuters.

A few of these contributing factors are:

• U.S. manufacturing activity fell to its lowest in 6 months
• Contracts for existing homes plunged 30% in May
• Construction spending fell 0.2% in May due to declines in private-sector building and gains in public-funded construction
• Unemployment claims rose by 13,000 last week
• Planned layoffs rose in June
• Private companies added only 13,000 jobs
• U.S. share prices fell to their lowest in 10 months
• The Dow Jones Industrials ended their second quarter down 10%, the worst since the first quarter of 2009 and the first quarterly decline since then
• The U.S. dollar fell next to the Euro and hit a 7-month nadir next to the yen
• Gold prices were slightly weaker
• U.S. and European government bond prices rose
• Benchmark 10-year U.S. yields fell to their lowest in 14-month lows

These latest trends raise concerns over the possibility of a double-dip recession though many analysts think this unlikely. Economic production continues to expand, though not quite as much as earlier.

Some market pros are still concerned.

“This is clearly pointing to a double-dip recession,” said Peter Kenny, managing director at Knight Equity Markets. “The market’s attempts at a rally were on life support until this housing and construction data came out. That life support was pulled out on the effort to close higher on the first day of the quarter.”

Also affecting markets were the pressure of a report showing a slow in Chinese manufacturing growth in June and by the warning of a possible credit downgrade on Spain by S&P and Moody.

“This will contribute not so much to more volatility, but to the market moving in one direction: lower,” Kenny said.

Markets are currently awaiting the employment report on Friday which is expected to yield disappointing numbers. Economists are expecting a loss of 110,000 jobs in June.

“Tomorrow could be a very painful day for data as the unemployment rate could tick up,” said Joseph Battipaglia, market strategist, Stifel Nicolaus. “None of the data is good for the bullish camp, which was expecting a V-shaped recovery for the rest of the year.”

The Federal Home Loan Bank of San Francisco is giving affordable housing grants to areas in Arizona, California, Illinois, Nevada, Oklahoma, Texas and Washington, as reported by the Phoenix Business Journal. Six Arizona cities are receiving these grants: Camp Verde, Flagstaff, Phoenix, San Luis, Surprise, and Tucson.

The grants project total is $32.5 million for all states. There are 60 projects in total that will address affordable housing needs in each state. The grants will produce or preserve 3.375 housing units for low-income individuals or families. According to the FHLBank San Francisco website, funds will be used to:

* acquire, construct, or rehabilitate rental housing

* provide homebuyer downpayment or closing cost assistance

* cover the cost of homebuyer pre- or post-purchase counseling

Recipients of the AHP grants had to go through a competitive application process (initiated and submitted by bank members) to receive the funds. They can be used to purchase, construct, and/or rehabilitate low-income housing. The bank’s member financial institution work with community partners who either sponsor or develop housing projects. Together they submit projects and programs for consideration twice per year.

“We are pleased that our members are using our program to deliver such critical resources to their communities,” said Jim Yacenda, vice president and community investment officer at FHLBank San Francisco.

The Federal Home Loan Bank of San Francisco delivers low-cost funding and other services to help member financial institutions make home mortgages to people of all income levels and provide credit that supports neighborhoods and communities.

The bank also funds community investment programs in order to help members create affordable housing. They do so in order to promote economic development within the community and surrounding neighborhoods. The bank’s members, shareholders and stockholders are commercial banks, savings institution, insurance companies, thrifts and loans, and credit unions with headquarters located in Arizona, California, and Nevada.