St Petersburg Mortgage and Real Estate Blog

When calculating how much it will cost to buy a home in St Petersburg Florida, some buyers say they feel discouraged. Coming up with the down payment and the closing costs lead many to think they don't have enough money to make the transaction work. There are some useful options to help make the home buying process more affordable.

One of the best ways first time or any home buyers in St Petersburg can lower their total costs is...To ask the SELLER to pay their closing costs.

But how does that work?

When using the FHA loan program, the seller is allowed to pay up to 6% of the purchase price towards closing costs and pre-paid items. This usually always covers the total closing costs. FHA only requires a 3.5% down payment which means if you buy a home for 100,000 and the seller pays your closing costs. You are only required to bring the 3.5% or $3500 to the closing table. FHA financing DOES require that the 3.5% is paid by the buyer. St Petersburg buyers, the 3.5% down payment does not have to come from your bank account. You can receive a gift from family for the whole amount, which would than allow you to buy the home with little or nothing out of your pocket.

Conventional financing allows the seller to pay up to 6% when the buyer has a 10% down payment. Gifts are also acceptable.

It is a great time to buy a home in St Petersburg with options that make the home buying process more affordable!!

Find out how much you can afford by filling out a loan application today!

Many buyers in St Petersburg have asked what a Home Path Mortgage is and how they can get approved for one?

Home Path is a mortgage loan product created by Fannie Mae for their Real Estate Owned (REO) properties to help buyers purchase a home quickly with easier terms than a standard mortgage loan product such as FHA or Conventional financing.

To qualify when buying a home that you will occupy, the borrower must have at least 3% of the purchase price as a down payment, 660 mid credit score with at least 2 years in the same line of work. The credit score can go as low as a 620, but the buyer must put down 20% of the purchase price. No monthly mortgage insurance premium and no appraisal required are two of the unique features of this loan product that saves the buyer time and money! If available, the Bank, who owns the REO property, is allowed to contribute money into the transaction to help pay the buyer's closing costs, allowing the borrower to come up with as little as only 3% of the purchase price. Investors can take advantage of this financing program as well by putting 10% of the purchase price down.

Home Path financing is only offered for specific REO properties and that information will be stated in the listing.

In St Petersburg, the median home value is around $150,000, making your mortgage payment close to $1000 a month, depending on taxes and insurance prices. If you don't have cash, which definitely is KING now more than ever, there are two main types of mortgage loans to choose from which help first time home buyers buy a home: FHA financing or Conventional financing. FHA mortgage financing has been most popular lately since it requires a lower down payment amount than Convention mortgage financing, and most first time home buyers prefer this.

 Below I have listed a comparison of how these home loans differ.

FHA MORTGAGE FINANCING REQUIREMENTS

3.5% DOWN PAYMENT

630 MID CREDIT SCORE

2 YEARS IN CURRENT EMPLOYMENT FIELD

US CITIZEN OR LEGAL RESIDENT

2.25% UP FRONT MORTGAGE INSURANCE (WHICH IS ADDED TO THE TOP OF THE LOAN

AMOUNT AND THE PORTION OF THE UNUSED AMOUNT IS REIMBUSED IF THE CLIENT SELLS OR REFINANCES WITHIN 5 YEARS)

LOWER MONTHLY MORTGAGE INSURANCE THAN CONVENTIONAL DUE TO THE UP FRONT AMOUNT COLLECTED

GIFTS ALLOWED IN ANY AMOUNT FROM RELATIVE

CONVENTIONAL MORTGAGE FINANCING

10% DOWN PAYMENT

660 MID CREDIT SCORE

2 YEARS IN CURRENT EMPLOYMENT FIELD

US CITIZEN OR LEGAL RESIDENT

MONTHLY MORTGAGE INSURANCE WHICH IS AT LEAST DOUBLE THE FHA  MORTGAGE INSURANCE

GIFT ALLOWED FOR THE FULL DOWN PAYMENT

Mortgage insurance is required for all loans unless the buyer puts 20% of the purchase price as a down payment.

Check out St Petersburg Mortgage and Real Estate Blog Friday to find out information on another attractive mortgage loan.

If you are a first time home buyer looking to buy a home in St  Petersburg or anywhere in Florida, you may feel intimidated by the home buying process and have heard horror stories about how hard it is to get approved for financing. Lenders are not taking many chances or risks these days and have tightened guidelines in efforts to avoid more foreclosures. The good news is that if you can qualify, a down payment on your own home is comparable to coming up with first, last, and security deposit on a rental. Your Realtor can structure an offer that has the seller pay for your closing costs, and you no longer have to make a landlord rich!

Qualifying for financing is the first step, and you will need to speak to a loan officer who will determine how much you are able to borrow by asking you questions and filling out a loan application. This process is really for your protection as well as the banks, and the goal is to make sure the home is affordable for you and that you do not get in over your head like so many people have done during the mortgage crisis. This can be done online or in person, whatever you feel more comfortable with. Do remember to be HONEST, lenders will be verifying everything, and the application is not like a credit card or car loan where you might get away with exaggerating your income.

For more information on how to qualify check our St Petersburg Mortgage and Real Estate Blog tomorrow for a comparison of loan products available in St. Petersburg for first time buyers.

Exciting News St Petersburg Home Buyers - Mortgage interest rates dropped steadily today!  The interest rates are lower than I have seen while I have been in the mortgage business for the last 9 years!  

Conventional mortgage interest rates are around 4% (depending on your credit score and down payment amount)

FHA loans are close to 3.75% today (depending on your credit score and down payment amount)

If any time is good to begin looking in for a home in St Petersburg now is that time andthink of all the money to be saved over a 30 year loan!  Who doesnt love to save!

Flood Insurance Update

Just yesterday US Senate Finance Chairman Max Baucus introduced a new bill that would, among many other provisions, reauthorize and extend the National Flood Insurance Program (NFIP). This is to replace the bill the US House passed right before Memorial Day - as it appears the Senate will not agree to the House bill. I’ve been informed by NAR this morning that the Senate is not expected to vote on this until next week. Since it is different from the House bill, it would then have to go back to the House for their approval. Unfortunately, it could be the end of next week (June 18th) before anything is finalized and signed by President Obama.

The regulatory agencies have all issued guidance to provide confidence to markets and lenders and to provide some possible solutions for the absence of flood insurance. Here are the websites with their guidance:

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/ll1005.pdf

http://www.freddiemac.com/singlefamily/news/2010/0601_nfip.html

http://www.fema.gov/business/nfip/

http://www.homeloans.va.gov/docs/fema_nfip_info_05312010.pdf

http://www.hud.gov/offices/hsg/sfh/hsgsingle.cfm

http://www.ots.treas.gov/_files/25338.pdf

It appears that the government has decided that they have spent enough incentive money on trying to help the housing market and that the tax credits for buyers is not going to get extended and is gone for good.  It will be interesting to watch the coming month's statistics and see if the real estate market will take a dive like the auto industry did when Cash For Clunkers ended.  Hopefully people will be motivated by the interest rates still being at an all time record low and the home prices being the most affordable that the area has seen in years. 

Investors are still taking advantage of properties that will cash flow for rentals and continue to build  portfolios for when the tide does turn and the market rebounds, which it eventually will.  (Here a crystal ball would be helpful.) 

The average family's desire for affordable housing under $200k continues to keep this end of the market moving and very competitive.  The only home more popular than a 3 bedroom, 2 bathroom, 1 car garage is the 3 bedroom, 2 bath, 2 car garage.

People who have been dreaming of living on the water are making this a reality by buying waterfront homes that are half the price of what they used to be.  Buyers are taking a hard look at properties in a similar price range that are inland and weighing their options carefully.  There is a definite appeal about pulling up to your house in your boat and having dolphins and sunsets in your back yard that makes the taxes and insurance worth it.  The return on these investments will be much greater down the line, but when down the line still is the question.

Another prediction for the coming months is that the market will take another dip, with banks continuing to foreclose on homes, put fortunate short sales out of their misery, and flood the market with more REO properties at rock bottom prices, that often are such compelling deals that they sell for more than asking price! 

And with regard to everyone's favorite transaction, THE LONG SALE (short sale), it is true that half the market in many areas are now in this state of pre-foreclosure.  These, along with all the REOs, are forcing the average home owner not in foreclosure trying to sell their home for a small profit to suffer huge consequences, and really aren't doing any favors for appraisals either.  The government is trying to come up with new guidelines to help facilitate the process that has been a complete failure so far.  It will be interesting to see how that works out, along with the rest of the issues our country has now that the government is trying to fix, but that's another story!

We will continue to update the market statistics for your review so you can decide if Now Is the Time To Buy A Home or not.

Florida schools earned a B minus for their overall report card which is conducted annually by Education Week magazine.  This was the same grade that Florida received in 2009.  This report card looked at six areas of policy and performance which include student achievement, accountability and school finance.  

Florida's lowest grade came in 31st place nationwide for their school finance but the academic standards and school accountability rated 5th place this year resulting in 8th for nationwide ranking.

Way to Go Florida School Systems!

With limits, beginning Feb 1st HUD will suspend the current policy for one full year, to allow buyers to make FHA loan application on a home that has been recently purchased. 

Currently, FHA applications can be taken on a property only after 90 days have passed from most recent sale date.  HUD states they are trying to open up their financing to buyers in the market that are looking to purchase homes that have recently foreclosed, allowing a quicker resale on these properties. 

There are limits on the transaction so click the link below for more details http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Housing Market Indicators:

Florida existing home sales:
(month-to-previous-year comparison)
61%

Florida existing condo sales:
(month-to-previous-year comparison)
111%

Florida existing home median price:

$139,000

Florida existing condo median price:

$104,400

Florida consumer confidence: 

69

National existing home sales: 
(month-to-previous-month comparison; all housing types)

7.4%

National existing home median price

$172,600

National (Freddie Mac) mortgage rate
(all housing types)

5.06%